In S&P Global Market Intelligence, Paul Tropp Analyzes SEC Guidance on SPAC Warrants
After officials at the U.S. Securities and Exchange Commission issued guidance on how to account for warrants, some special purpose acquisition companies announced they will restate their financial statements after evaluating whether their warrants needed treatment as equity or liability on their balance sheets. The SEC statement has played a role in the dramatic drop off in new SPAC listings in April.
In an article published by S&P Global Market Intelligence, capital markets partner and co-chair Paul Tropp (New York) notes that there is a lot of confusion in the marketplace in light of the SEC guidance. Auditors, accountants and lawyers are still debating what to do about SPACs that have already issued warrants as well as how new SPACs coming to market can issue warrants that are treated as equity.