5.09 Four drafting slips in the Note 1 accounting policies
Company F · a US-listed networking equipment company · Drafting slip
In brief
Note 1 carries three small slips: the Accounting Standards Update (ASU) paragraph opens 'On [date]' instead of 'In [date]' (page 80); the sentence on where contract liabilities sit in the balance sheet ends without a full stop (page 78); and the deferred revenue sentence has a stray comma in '[wording masked]' post-contract customer support (PCS) contracts (page 78, repeated in the deferred revenue note on page 84). In both years the credit-risk paragraph also repeats its credit-evaluation sentence, the second time calling the customer 'the borrower' (p.74). None changes a figure or a policy.
The evidence, as filed
What the filing shows, and what the rule requires
| What the filing shows | What the rule requires |
|---|---|
'On [date], the FASB issued ASU 2025-11'; '...other long-term liabilities in the accompanying consolidated balance sheets' (no full stop); '[wording masked]' | 'In [date], the Financial Accounting Standards Board (FASB) issued ASU 2025-11'; the contract-liabilities sentence ends with a full stop; '[wording masked]' |
Why it matters
Cosmetic only; correcting the slips tidies the filed text.
Exposure
No consequence beyond presentation.
Our workings
the three passages read as quoted on pages 78 and 80 of the Form 10-K (seen on the page images).
each is a typesetting or wording slip; none alters an amount, an accounting policy or a judgment, so they are listed as drafting only.
Management’s best defense, and our reply
The preparer would say these are trivial typesetting slips that no reader would misread, and that the report is already filed, so any correction can only come in the next Form 10-K. That is right on weight, which is why they are listed as drafting slips and nothing more. However, they are still errors in the filed text and should be corrected in the next annual report.
The fix
- Read 'In [date], the FASB issued ASU 2025-11'; end the contract-liabilities sentence with a full stop; delete the comma after 'acceptance clauses and'.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Slip 1: 'On [date]' should read 'In [date]' | Document | Form 10-K 2025, page 80 |
| 2 | Slip 2: the sentence ends without a full stop before the next paragraph | Document | Form 10-K 2025, page 78 |
| 3 | Slip 3: stray comma after 'and' in the deferred revenue sentence | Document | Form 10-K 2025, page 78 |
| 4 | Prior-year 10-K: the credit-risk paragraph repeats its credit-evaluation sentence a second time and calls the customer 'the borrower' | Document | Form 10-K 2024 (prior year), page 80 |
| 5 | Current 10-K: the same repeated sentence referring to 'the borrower' is carried forward unchanged in the Note 1 credit-risk paragraph | Document | Form 10-K 2025, page 74 |
Prepared by Pramanex from the company’s public SEC filings, without the company’s involvement, to show how a 10-K Pre-filing Check reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other attestation or assurance engagement, and not legal advice. An SEC-style question is a question, not a conclusion.
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