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Perspectives

A roadmap to initial public offerings (2019)

Preparing for an initial public offering (IPO) can be a complex, time-consuming, and often costly process. Accordingly, this Roadmap addresses financial reporting, accounting, and auditing considerations to help companies navigate challenges related to preparing an IPO registration statement and ultimately going public.

Promoting the U.S. IPO market has been a priority for SEC Chairman Jay Clayton. On September 26, 2017, Chairman Clayton made the following statement before the U.S. Senate Committee on Banking, Housing, and Urban Affairs:

It is clear to me that companies that go through the U.S. IPO process emerge as better companies, with better disclosure. We want to encourage and preserve that dynamic. Overall, the SEC will strive for efficiency in our processes to encourage more companies to consider going public, which will result in more choices for investors, job creation and a stronger U.S. economy.

As further evidence of its commitment to promoting the U.S. IPO market, the SEC issued a proposed rule on February 19, 2019, which would expand the “test-the-waters” accommodation and allow all prospective issuers to gauge market interest in a possible IPO by permitting discussions with certain investors before the filing of a registration statement. Previously, the test-the-waters accommodation was only available to emerging growth companies (EGCs). In the press release on the proposed rule, SEC Chairman Jay Clayton noted the following:

Extending the test-the-waters reform to a broader range of issuers is designed to enhance their ability to conduct successful public securities offerings and lower their cost of capital, and ultimately to provide investors with more opportunities to invest in public companies . . . . I have seen first-hand how the modernization reforms of the JOBS Act have helped companies and investors. The proposed rules would allow companies to more effectively consult with investors and better identify information that is important to them in advance of a public offering.


In addition, as part of its disclosure effectiveness initiative, the SEC has been exploring ways to make going public in the U.S. markets more attractive while still protecting investors.

We hope you find this Roadmap useful as you prepare for your IPO. Should you have questions or concerns, please visit Deloitte’s IPO Center of Excellence or contact a Deloitte Partner listed in the contacts section of this publication.

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The Roadmap Series contains periodic collections of our accounting guidance on selected topics of broad interest to the financial reporting community.

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