Form 20-F is the primary disclosure document required of foreign private issuers listing equity shares on exchanges in the United States. It’s most often filed with the Securities and Exchange Commission (SEC) as an annual report but is also used to register classes of securities. Companies with fewer than 50% of its voting shares held by US investors can file this form.
Under both the Securities Act and the Exchange Act, Form 20-F is meant to help standardize reporting requirements so investors can evaluate foreign-based companies’ equities alongside US-based companies’ equities. Accordingly, Form 20-F disclosures are very similar to those required of US issuers, reporting information such as key operational details, market risks, corporate governance and financial statements.
However, there are two main differences. First, if a foreign private issuer prepares financial statements in accordance with home-country accounting standards or not to IASB (International Accounting Standards Board) IFRS (International Accounting Standards Board International Financial Reporting Standards), it must also furnish reconciliation with US GAAP (Generally Accepted Accounting Principles). Second, foreign private issuers are allowed to disclose executive compensation in aggregate and don’t have to provide a Compensation Discussion & Analysis.