The 8-K: when something big happens
Big news doesn’t wait for the next quarterly report. When something important happens, a public company files an 8-K. This lesson teaches you to read the item numbers at the top, which tell you what kind of news is inside before you read a word of it.
What an 8-K is
An 8-K, also called a current report, is a short filing a company makes when a specific kind of event happens. The SEC keeps a list of these events. If one occurs, the company generally has four business days to file. Business days skip weekends and federal holidays.
Each event type on the SEC’s list has a number, called an item. The front of every 8-K says which items it covers. One 8-K can cover several items at once, and the item numbers are the same for every company.
Pinecrest Phones Inc. announces on a Thursday that its CEO is leaving. There are no holidays that week.
- Friday is business day 1.
- Saturday and Sunday don’t count.
- Monday is day 2, Tuesday is day 3, Wednesday is day 4.
Pinecrest has until the following Wednesday to file its 8-K under item 5.02.
How the items are grouped
The first digit of an item tells you its family. Section 1 is about the company’s business deals. Section 2 is about its money and assets. Section 3 is about its shares and their listing. Section 4 is about its accountants and its past reports. Section 5 is about leadership and governance. Sections 7, 8 and 9 hold general items.
The common items in plain words
| Item | What it means |
|---|---|
| 1.01 | The company signed an important contract, such as a big supply deal, a loan or a merger agreement. |
| 1.02 | An important contract was ended. |
| 1.03 | The company filed for bankruptcy, or a court put someone else in control of its assets. |
| 1.05 | The company suffered a serious cybersecurity incident. |
| 2.01 | The company finished buying or selling a large business or a large group of assets. |
| 2.02 | The company released its results for a quarter or year. Usually the earnings press release is attached. |
| 2.03 | The company took on a large new debt. |
| 2.05 | The company committed to a plan to close operations or cut jobs, with costs to come. |
| 2.06 | The company concluded that some assets are worth much less than its books say and must write them down. |
| 3.01 | The stock exchange warned that the company’s shares may be removed from trading, or the company broke a listing rule. |
| 3.02 | The company sold new shares privately, outside a public offering. |
| 4.01 | The company changed its outside auditor. |
| 4.02 | Financial statements the company already published can no longer be relied on. |
| 5.01 | Control of the company changed hands. |
| 5.02 | A director or top officer left or was appointed, or a top officer’s pay deal changed. |
| 5.03 | The company changed its basic rules (its charter or bylaws) or its fiscal year. |
| 5.07 | Results of an owners’ vote, usually from the yearly meeting. |
| 7.01 | Information the company is sharing with everyone at once, such as slides for an investor event. |
| 8.01 | Other news the company chose to report. |
| 9.01 | A list of the documents attached to the 8-K. |
The eight items in bold are the ones Filing.fyi treats as major. They signal events that can change the story of a company quickly: survival, ownership, leadership, or whether the numbers can be trusted.
A few items in more detail
A write-down is easy to misread, so slow down. Item 2.06 covers an impairment, which is when an asset on the books turns out to be worth much less than recorded. Say a company paid $100 million for another business, and that business is now earning far less than hoped. The company may cut its book value and record a loss. No cash leaves that day, because the money was spent years earlier. But it is an admission that a past bet went badly.
Item 5.02 needs context. Leaders come and go for ordinary reasons, like retirement. Context matters. A finance chief who leaves suddenly, with no successor named, deserves more attention than a planned retirement announced a year ahead.
Why an auditor change raises eyebrows
The auditor is the outside accounting firm that checks a company’s numbers each year. Companies do switch auditors for dull reasons, such as fees. But a switch can also mean the auditor and management disagreed about how to count something.
That is why item 4.01 comes with built-in safeguards. The company must say whether it had any disagreements with the old auditor. It must also ask the old auditor for a letter, addressed to the SEC, saying whether the auditor agrees with the company’s account, and attach that letter to the 8-K (sometimes in a follow-up filing a few days later). Read the letter. A short, plain agreement is reassuring. Anything else is worth a closer look.
Why item 4.02 is one of the most serious
Item 4.02 means the company, or its auditor, has concluded that past financial statements contained an error big enough that people should stop relying on them. The company will usually need a restatement, which means re-issuing those reports with corrected numbers.
This hits at the foundation. Every judgment you made about the company rested on those numbers. A restatement also raises a hard question: if this error slipped through, what else might have?
Maple Bikes Inc. files an 8-K under item 4.02. It says it counted some sales too early: bikes it recorded as sold last year were actually delivered this year.
| Line | As first reported | Restated |
|---|---|---|
| Sales | $50 million | $45 million |
| Profit | $5 million | $3 million |
Step 1. Sales fall by $50 million − $45 million = $5 million. That is $5 million ÷ $50 million = 10% lower.
Step 2. Profit falls by $5 million − $3 million = $2 million. That is $2 million ÷ $5 million = 40% lower.
Step 3. Notice the gap. A 10% cut in sales caused a 40% cut in profit, because the moved sales carried profit with them while most costs stayed put. Small accounting errors at the top line can hit the bottom line hard.
- 8-K
- A short report a company files when certain important events happen; also called a current report.
- Item
- A numbered event type on the SEC’s 8-K list.
- Business day
- A weekday that is not a federal holiday.
- Impairment
- A write-down when an asset is worth much less than the company’s books say.
- Auditor
- The outside accounting firm that checks a company’s financial statements.
- Restatement
- Re-issuing past financial reports with errors corrected.
Where to see it on Filing.fyi
Every company’s filing timeline includes its 8-Ks, and its filings page lists them by category. Start from the ticker list. On the ad-free plan, Filing.fyi emails you when a company on your watchlist files an 8-K with one of the eight major items above. For how auditors flag deeper trouble, see going-concern warnings.
- An 8-K reports a big event, generally within four business days.
- The item numbers at the top tell you what kind of news is inside.
- Bankruptcy, big deals, write-downs, delisting notices, auditor changes, restatements, control changes and leadership changes are the major items.
- An auditor change comes with a letter from the old auditor; read it.
- Item 4.02 means past numbers can’t be trusted, which is about as serious as an 8-K gets.
This lesson is education, not investment advice. Examples use made-up companies and round numbers unless a real filing is named.