Chemicals
13 SEC staff comments and 9 disclosure examples from companies in this industry.
SIC codes included: 2844 Perfumes, Cosmetics & Other Toilet Preparations, 2860 Industrial Organic Chemicals, 2800 Chemicals & Allied Products, 2810 Industrial Inorganic Chemicals, 2870 Agricultural Chemicals, 2840 Soap, Detergents, Cleang Preparations, Perfumes, Cosmetics, 2890 Miscellaneous Chemical Products
Disclosure examples by topic
Chemicals: Earnings per share (ASC 260)1 exampleChemicals: Climate & GHG disclosures1 exampleChemicals: Goodwill impairment testing1 exampleChemicals: Non-GAAP measures in MD&A1 exampleChemicals: Variable interest entities (ASC 810)1 exampleChemicals: Discontinued operations (ASC 205-20)1 exampleChemicals: Restructuring (ASC 420)1 exampleChemicals: Related party transactions (ASC 850)1 exampleChemicals: Subsequent events (ASC 855)1 example
What the SEC staff asked companies in this industry
ASC 606: Revenue Recognition (4)ICFR & Disclosure Controls (3)ASC 606: Principal vs. Agent (2)MD&A: Results & Known Trends (1)Goodwill & Asset Impairment (1)Capitalization, Equity & Escrow (1)Non-GAAP: Adjustments & Labels (1)Non-GAAP: Reconciliation & Usefulness (1)Segment Reporting (ASC 280) (1)Income Taxes (1)Exhibits, Certifications & Signatures (1)
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 1 · Item 9A. Controls and Procedures , page 20 Agreed to revise
Staff comment: In future filings, please disclose management's conclusion regarding the effectiveness of your disclosure controls and procedures as required by item 307 of Regulation S-K. letter →
Company response: We acknowledge the Staff’s comment. In future Annual Reports on Form 10‑K and Quarterly Reports on Form 10‑Q, we will revise our disclosure under “Controls and Procedures” to explicitly state management’s conclusion regarding the effectiveness of our disclosure controls and procedures as of the end of the period covered by the report, as required by Item 307 of Regulation S‑K. 1 By way of example, we expect to include language substantially similar to the following (subject to updates as of each reporting date): “As of _______________, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and… response letter →
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 2 · Revenue Recognition, page F-9 Agreed to revise
Staff comment: Please explain how you account for revenue related to the sale of carbon credits. Specifically, tell us 1. The nature of the carbon credits, whether voluntary or for compliance; 2. How you determine when control of the carbon credits transfers to customers; 3. Any ongoing performance obligations after the sale; 4. How you determine the transaction price, including variable considerations due to regulatory or reversal risks. letter →
Company response: We generate revenue from the sale of carbon credits and from consulting and related services. Our environmental attributes are both compliance focused (such as Canada Federal OBPS or Alberta TIER) and voluntary focused (transacted withing Gold Standard, Verra, etc.). We apply ASC 606, Revenue from Contracts with Customers , to these arrangements. (1) Nature of the carbon credits Our contracts with customers typically involve the sale of environmental attributes that are either: · Project generated credits: Credits we originate or control through our participation in underlying projects (e.g., afforestation, reforestation, or other verified emissions reduction projects); or · Purchased… response letter →
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 3 · Page 2 Agreed to revise
Staff comment: Explain how you determined that you are the principal in transactions involving the sale of carbon credits. In your response, describe how you assessed the indicators outlined in ASC 606-10-55-36 through 55-40. letter →
Company response: , describe how you assessed the indicators outlined in ASC 606‑10‑55‑36 through 55‑40. Response: We acknowledge the Staff’s comment and have evaluated whether we act as principal or agent in our carbon credit transactions under ASC 606‑10‑55‑36 through 55‑40. In most of our carbon credit sales, we conclude that we are the principal because we control the credits before they are transferred to the customer. Our assessment is based on the following indicators: · Control of the asset before transfer (ASC 606‑10‑55‑37): We obtain control of the credits either by (i) originating them through our project arrangements, or (ii) purchasing them from third parties and holding them in our registry… response letter →
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 4 · ASC 606-10-55-36 through 55-40. Agreed to revise
Staff comment: Provide a rollforward of deferred revenue, including a breakdown of the underlying balances by current and non-current portions and discuss when you expect to recognize the related revenue as required by ASC 606-10-50-8 through 50-10. letter →
Company response: We acknowledge the Staff’s comment. We recognize that ASC 606‑10‑50‑8 through 50‑10 requires disclosure of the opening and closing balances of contract liabilities (deferred revenue), significant changes in those balances, and information about the timing of revenue recognition for remaining performance obligations. Below is a roll forward as requested. FY2025 (Year Ended May 31, 2025) Q2 FY2026 (Six Months Ended Nov 30, 2025) Opening balance $ - $ 3,864,080 Heidelberg deferred revenue $ 928,042 $ (928,042 ) DevvStream deferred revenue $ 2,936,038 $ - Other deferred revenue $ - $ 26,764 Currency translation $ - $ (47,901 ) Closing balance $ 3,864,080 $ 2,914,901 Current portion $ 3,864,080… response letter →
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 5 · the related revenue as required by ASC 606-10-50-8 through 50-10. Responded
Staff comment: In future filings, please provide your revenue disaggregation in accordance with ASC 606-10-50-5, 606-10-55-89 through 55-91. It appears you have revenue generated from selling carbon credits and providing consulting services. letter →
Company response: We acknowledge the Staff’s comment. We agree that our revenue should be disaggregated to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors, as required by ASC 606‑10‑50‑5 and 55‑89 through 55‑91. In future Annual Reports on Form 10‑K and, where material, Quarterly Reports on Form 10‑Q, we will disaggregate revenue by type of good or service and, if relevant, by geographic region or market. We will also provide the required narrative discussion linking the disaggregated revenue to our segment information (if applicable) and to our revenue recognition policies. Form 10‑Q for the Quarter Ended November 30, 2025 6 Item 2.… response letter →
Karbon-X Corp. (KARX) · 2026-03-05 · Form 10-K for the Fiscal Year Ended May 31, 2025 Form 10-Q for the Quarter Ended November 30, 2025 · Comment 6 · 2024, page 23 Agreed to revise
Staff comment: We note a significant increase in your revenue during the first six months of fiscal year 2026. Please provide us with a comprehensive explanation for the significant increase and explain how your new trading subsidiary contributed to this sales growth as part of your response. If applicable, indicate the volume vs price increase of carbon credits. Please also revise future filings as applicable. letter →
Company response: If applicable, indicate the volume vs price increase of carbon credits. Please also revise future filings as applicable. Response: We acknowledge the Staff’s comment. The significant increase in revenue during the six months ended November 30, 2025 (the first six months of fiscal year 2026) was primarily driven by: · Increased trading activity in carbon credits through our new trading subsidiary, Karbon-X Trading Limited; · Higher volumes of credits sold compared to the prior year period Contribution of the new trading subsidiary During the six months ended November 30, 2025, our new trading subsidiary, Karbon-X Trading Limited, became fully operational and engaged in spot and forward… response letter →
COTY INC. (COTY) · 2026-02-26 · Form 10-K for the Year Ended June 30, 2025 Form 10-Q for the Period Ended December 31, 2025 · Comment 1 · Critical Accounting Policies, page 60 Agreed to revise
Staff comment: You disclose, “there have been no material changes to the items disclosed as critical accounting policies and estimates,” including goodwill, since the disclosure in the Form 10-K. Please expand your disclosure to address the subsequent substantial decrease in market capitalization and the impact on your assessment of the likelihood of future material goodwill impairment charges. Tell us and disclose your consideration of ASC 350-20-35-30 and the need to perform a more recent impairment test. letter →
Company response: The Company acknowledges the Staff’s comment. We will enhance our future disclosures to address our consideration of the Company’s market capitalization, including any declines in market capitalization, if applicable, in our goodwill impairment assessment. We propose to include enhanced disclosure within the Critical Accounting Policies section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), beginning with our Form 10-Q for the Fiscal Quarter Ended March 31, 2026. The following is an illustration of the disclosure updates (underscored language indicates new disclosure) based on page 60 of our Form 10-Q filed on February 5, 2026.… response letter →
CABOT CORP (CBT) · 2026-02-19 · Form 10-K filed November 24, 2025 · Comment 1 · Definition of Terms and Non-GAAP Financial Measures, page 30 Agreed to revise
Staff comment: As noted on page 31, your non-GAAP measure, total segment EBIT, excludes unallocated corporate overhead expenses, such as certain corporate salaries and headquarters expenses, plus costs related to special projects and initiatives. As such, this non-GAAP measure appears to exclude normal, recurring, cash operating expenses and may therefore not comply with Rule 100(b) of Regulation G and Item 10(e) of Regulation S-K. With specific reference to Question 100.01 of the Division of Corporation Finance’s Compliance & Disclosure Interpretations on Non- GAAP Financial Measures, please confirm you will revise future filings, including earnings releases filed under Form 8-K, to eliminate this… letter →
Company response: For ease of reference, we have restated the Staff’s comment before our response below. Form 10-K for the Year Ended September 30, 2025 Management’s Discussion and Analysis Results of Operations Definition of Terms and Non-GAAP Financial Measures, page 30 As noted on page 31, your non-GAAP measure, total segment EBIT, excludes unallocated corporate overhead expenses, such as certain corporate salaries and headquarters expenses, plus costs related to special projects and initiatives. As such, this non-GAAP measure appears to exclude normal, recurring, cash operating expenses and may therefore not comply with Rule 100(b) of Regulation G and Item 10(e) of Regulation S-K. With specific reference… response letter →
Air Products & Chemicals, Inc. (APD) · 2026-01-27 · Form 10-K for Fiscal Year Ended September 30, 2025 Filed November 20, 2025 · Comment 1 · Effective Tax Rate, page 136 Responded
Staff comment: We note that you attributed a (49.0)% income tax benefit to the business and asset actions in the effective tax rate reconciliation. We further note your statement that the tax benefit from the $3.7 billion pre-tax charges for business and asset actions is $695.2 million. Please provide us with a reconciliation of the tax benefit included in the effective tax rate reconciliation and the stated tax benefit with those costs. Please also consider the need to provide enhanced disclosures explaining the components of the business and asset actions line item in the effective tax rate reconciliation. letter →
Company response: Because we incurred a loss from continuing operations before taxes of $440.7 million in our Fiscal Year 2025 Consolidated Income Statement, negative percentages within the Effective Tax Rate Reconciliation Table reflect an increase to our Effective Tax Rate. The (49.0%) impact on our Effective Tax Rate primarily represents the portion of such costs included in our pre-tax charge for which we recognized a tax benefit, offset by a corresponding valuation allowance as such benefits were not more likely than not to be realized and therefore had a negative impact on our Effective Tax Rate. During our fiscal year 2025, we incurred pre-tax charges of $3,747.0 million for business and asset actions… response letter →
Global Gas Corp (HGAS, HGASW) · 2025-12-29 · Form 10-K for Fiscal Year Ended December 31, 2024 Filed March 31, 2025 Form 10-Q for Fiscal Quarter Ended September 30, · Comment 2 · 1. We note your response to comment Awaiting / response not in dataset
Staff comment: Please expand your disclosures to include the information required by Item 308(a)(2) and Item 308(a)(3) of Regulation S-K. Form 10-Q for the Quarter Ended September 30, 2025 Exhibit 31, page 29 2. Please expand the language included in paragraph 4 to the 302 certifications to include “and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))” as required by Item 601(b)(31)(i) of Regulation S-K. letter →
Global Gas Corp (HGAS, HGASW) · 2025-12-11 · Form 10-K for Fiscal Year Ended December 31, 2024 Filed March 31, 2025 · Comment 1 · Item 9A. Controls and Procedures, page 38 Awaiting / response not in dataset
Staff comment: We note you identified a material weakness in your internal control over financial reporting but have concluded that your disclosure controls and procedures were effective. Section II.D. of SEC Release No. 33-8238 states, “disclosure controls and procedures will include those components of internal control over financial reporting that provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles.” Please tell us how you are able to support your conclusion that your disclosure controls and procedures are effective as of December 31, 2024, and the end of subsequent quarters.… letter →
Global Gas Corp (HGAS, HGASW) · 2025-12-11 · Form 10-K for Fiscal Year Ended December 31, 2024 Filed March 31, 2025 · Comment 2 · subsequent Forms 10-Q to revise your conclusions. Awaiting / response not in dataset
Staff comment: We note that this Form 10-K is your first annual report after the merger with the SPAC entity. In accordance with Instruction 1 to Item 308 of Regulation S-K, please expand your disclosures in the amendment to your Form 10-K to state that the annual report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. letter →
Global Gas Corp (HGAS, HGASW) · 2025-12-11 · Form 10-K for Fiscal Year Ended December 31, 2024 Filed March 31, 2025 · Comment 3 · Securities and Exchange Commission for newly public companies. Awaiting / response not in dataset
Staff comment: In an amendment to your Form 10-K, please provide the disclosures required by Item 308(c) of Regulation S-K. Also address this comment for your subsequent Forms 10- Q. letter →
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