The SEC Wants to Cut Quarterly Reporting. That’s a Start.
For 50+ years, the Q-10 has been a fixture of financial reporting for public companies. It’s so ingrained, few people ask whether it still makes sense.
The SEC and FASB are finally asking.
Officials from both bodies recently confirmed they’re preparing for optional semi-annual reporting.
Companies would file twice a year instead of four times, opting in by checking a box on their 10-K. A new form, the 10-S, would replace the quarterly 10-Q for companies that choose it.
It's voluntary. Companies that prefer quarterly reporting keep it. That means the market itself will signal what investors actually need.
David Leary and I covered the news on Episode 487 of The Accounting Podcast.
Here's how I see the trade-offs.
The Case For Semi-Annual Reporting
It ends the brutal quarterly reporting cycle. Quarterly reporting means four internal closes, four audit cycles, four rounds of disclosure review, and four earnings calls every year. Cut that in half, and you free up real capacity for finance teams and audit firms.
It relieves pressure on an already thin talent pool. Accounting has a well-documented talent shortage. If we want to attract and retain great people, we have to stop burning them out on a frantic quarterly reporting cycle. Semi-annual reporting supports retention and makes accounting look like a desirable career to someone weighing their options.
It could reduce short-termism. David made the point on the podcast that quarterly reporting creates quarterly pressure. Most business models can’t pivot in 12 weeks. The pressure to show quarterly progress incentivizes earnings management over actual business building. Semi-annual reporting loosens the ratchet.
The Counterargument
Investors get information less frequently. That's the core objection, and it's legitimate. For a company going through a big strategic shift or an operational crisis, six months is a long time.
The adverse selection problem. If companies with good news to share stick with quarterly reporting and companies with bad news opt into semi-annual, the 10-S could become a signal, and not a reassuring one.
Voluntary doesn't mean simple. Two different reporting cadences create comparability problems for analysts covering sectors where some companies report quarterly, and some don’t.
The Bigger Question
Beyond the logistics, the debate over quarterly versus semi-annual reporting assumes that what we're currently reporting is useful. I'm not sure that's entirely true.
The SEC and FASB plan to address how often companies file.
We also need to ask what we’re capturing.
In the 70s, tangible assets like factories and inventory told nearly the entire story. Today, it’s the opposite.
Intangible assets like brands, customer relationships, proprietary technology, workforce capabilities, and data now account for roughly 92% of market value for S&P 500 companies.
But under U.S. GAAP, we expense these drivers of value or ignore them entirely.
So when regulators talk about not disclosing what doesn’t matter to investors, I have to ask: Do earnings reports tell investors what drives value creation in a knowledge economy?
Often, the honest answer is no.
This Is Only a Start
I support the shift to semi-annual reporting. It’s a necessary relief valve for a profession under immense pressure.
But this is a minor reform.
We need to think critically about what belongs on a balance sheet in 2026.
What would it take to make financial statements genuinely useful again?
Listen to the full discussion on The Accounting Podcast.
