Tariff Disclosures in SEC Filings: 2026 Best Practices

Boilerplate tariff risk factor language that passed muster in 2024 is drawing SEC staff comments in 2026. If your Q2 or Q3 10-Q still reads "tariffs could adversely affect our business," you have a problem. This playbook tells you exactly what the SEC expects, section by section, and where the real accounting decisions now live.

Key takeaway: KPMG's analysis of Q1 2026 Form 10-Q filings confirms a significant increase in tariff-related disclosures appearing inside the financial statements, not just in MD&A and risk factors. A siloed approach no longer meets the standard.

What SEC Staff Actually Expect from Tariff Disclosures in 2026

The bar has moved from "mention tariffs" to "explain your specific exposure, quantify the impact, and describe what you are doing about it." The SEC's Division of Corporation Finance updated its interpretive guidance as recently as June 23, 2026, and the 2020 Commission Guidance on MD&A (Release No. 33-10751) remains the operative framework. That guidance requires companies to discuss known trends and uncertainties with enough specificity that investors understand management's perspective, not merely recite risk factors.

At PLI's SEC Speaks conference in 2026, the Division of Corporation Finance's chief accountant, Heather Rosenberger, confirmed that while tariff disclosure specificity has improved, companies should not get creative with how they present tariff costs. Non-GAAP adjustments designed to strip out tariff impacts are, in her words, "likely not appropriate."

EY's 2026 Form 10-Q guide reinforces the Item 303 obligation: tariff cost increases that are known and material must be quantified, not merely described in general terms. EY's September 2025 review of SEC staff comment letter trends, cited in Skadden's January 2026 annual meeting memo, identified MD&A disclosure of macroeconomic trends and uncertainties as a recent area of staff focus. Companies that fail to update MD&A to reflect tariff-driven trends face heightened comment letter risk.

The Section-by-Section Disclosure Architecture

Tariff disclosures do not live in one place. Skadden's January 2026 guidance to Fortune 500 companies identifies integration across multiple sections as the first best-practice pillar. Here is where each obligation sits.

Item 105 (Risk Factors): Move Past Hypotheticals

If tariffs have already hit your margins, your risk factor must describe what happened, not what might happen. Generic language about potential tariff impacts is now a red flag when the actual impact is already in your financials.

Best-practice risk factors in 2026:

• Name the specific tariff regimes affecting your business (IEEPA-based rates, Section 301 duties, retaliatory measures from trading partners)
• Quantify exposure where possible (percentage of COGS sourced from affected geographies, estimated annual cost impact)
• Address both direct effects (increased input costs) and indirect effects: supplier cost pass-throughs, customer demand shifts, delays in contract awards or regulatory approvals
• Decide whether to add a standalone tariff risk factor or integrate into existing supply chain and macroeconomic risk factors. Either approach works; inconsistency between them does not.

A September 2025 survey of Fortune 500 Form 10-Qs, cited in Skadden's memo, found that several impacted companies had already replaced boilerplate with tailored narratives. That peer benchmark is what SEC staff will use when reviewing your filing.

Item 303 (MD&A): Quantify or Explain Why You Cannot

MD&A is where the SEC expects the most substantive tariff disclosure. Item 303 of Regulation S-K requires discussion of known trends, demands, commitments, events, or uncertainties reasonably likely to have a material effect on financial condition or results of operations.

What that means in practice for tariff disclosures:

1. Quantify the impact. State the dollar amount or basis-point margin effect of tariffs in the period. If you cannot give a precise figure, explain why and provide a range or directional estimate.
2. Describe your mitigation actions. Skadden's guidance is explicit: when relevant, companies should disclose specific actions taken or planned to mitigate adverse effects, such as supply chain adjustments, contract renegotiations, or changes in product pricing. This is now a required component, not optional color.
3. Address your forward-looking assumptions. If your guidance assumes a particular tariff rate environment, say so. Skadden notes that companies should consider whether any assumptions made regarding forecasted results are impacted by tariffs and trade policies.
4. Update continuously. Tariff policy can shift materially between the draft and the filing date. Build a process for last-minute updates. The SEC staff will compare your MD&A against your earnings call transcript.

For companies with both US import exposure and international operations subject to retaliatory tariffs, MD&A must address both sides. NIKE's FY2025 10-K (fiscal year ended May 31, 2025) illustrates this dual-exposure approach for a company with significant Asia-Pacific sourcing and international sales. The US dollar index was down approximately 8% year-to-date as of July 31, 2025, compounding the disclosure obligation: companies facing tariff cost increases on imports AND foreign currency headwinds on international revenues have a dual quantitative disclosure requirement that spans Item 303 and Item 7A (Quantitative and Qualitative Disclosures About Market Risk).

Financial Statement Notes: The Shift That Most Teams Are Missing

This is the gap that generic best-practice articles miss entirely. KPMG's Q1 2026 analysis confirms that tariff-related considerations are now appearing with increasing frequency inside the financial statements. A siloed approach, where tariff disclosure lives only in risk factors, misses multiple note obligations.

The relevant ASC codification sections, mapped to the disclosure trigger:

For the ASC 350/360 interaction, see Finrep's Q2 2026 goodwill impairment triggering events guide, which addresses when tariff-driven indicators require an interim test in the same 10-Q.

The IEEPA Tariff Refund Decision: Recognize or Disclose Why You Have Not

This is the single most technically complex and currently unsettled accounting question in tariff disclosures, and most best-practice articles either ignore it or treat it superficially.

Following the US Supreme Court ruling on IEEPA tariff legality and subsequent actions by the Court of International Trade (CIT) and Customs and Border Protection (CBP), registrants must now make an explicit accounting decision. KPMG's updated Hot Topic on tariffs and financial reporting identifies three outcomes in practice:

Outcome 1: No recognition (most common). Most registrants that disclosed something on the matter have not recognized any benefit, citing uncertainty regarding the timing, amount, and ultimate realization of potential refunds. These disclosures typically state that recovery is not yet considered probable or realizable under ASC 450.

Outcome 2: Recognition with disclosure (emerging practice). A smaller subset of registrants has recognized receivables associated with potential tariff refunds, typically under ASC 410-30. These filings include disclosure of the basis for that conclusion and the estimated amounts recorded in the period.

Outcome 3: Subsequent receipt of refunds (very limited). In a very limited number of Q1 2026 cases, registrants have begun to receive actual tariff refunds subsequent to period end, creating a new category of subsequent event disclosure under ASC 855.

For a detailed technical treatment of the ASC 450 vs. ASC 410-30 recognition framework, see Finrep's dedicated guide on IEEPA tariff refunds accounting. The practical point for disclosure teams: if you have not yet worked through this decision with your auditors, you are behind. The SEC staff will expect to see either a recognized receivable or an explicit disclosure of why recognition was not appropriate.

The Tax Provision Interaction: One Big Beautiful Bill Act

This connection is absent from every other tariff disclosure article currently ranking.

The One Big Beautiful Bill Act, signed July 4, 2025, made the 21% corporate tax rate permanent. Every after-tax tariff cost figure disclosed in MD&A, and every tax provision note under ASC 740, must now use that permanent rate. If your MD&A states that tariffs increased pre-tax costs by $X, the after-tax figure must be consistent with the 21% rate. Inconsistency between the tariff cost narrative in MD&A and the tax provision note is an internal consistency problem that SEC staff will flag. For the broader tax provision implications, see Finrep's SEC tariff accounting guidance practitioner interpretation.

The Non-GAAP Trap: "Tariff-Adjusted" Metrics

Some companies are presenting "tariff-adjusted" or "ex-tariff" earnings metrics in earnings releases. The SEC's position, stated at SEC Speaks 2026, is that non-GAAP adjustments designed to strip out tariff impacts are likely not appropriate. Tariffs are recurring, cash-settled costs of doing business, not one-time items.

If a tariff-adjusted metric appears in an SEC filing, whether in the body of a Form 8-K or incorporated by reference, it must comply with Item 10(e) of Regulation S-K and the SEC's 2016 non-GAAP Compliance and Disclosure Interpretations. That means a prominent reconciliation to the most directly comparable GAAP measure and a clear explanation of why management believes the non-GAAP measure is useful. The safer path is to present the tariff impact as a quantified line item within GAAP results, so investors can make their own adjustment if they choose.

Consistency Across All Communications: The Reg FD Dimension

This risk is underappreciated and unaddressed in existing best-practice literature.

Skadden's 2026 guidance is explicit: disclosures in periodic reports, earnings releases, investor presentations, and the proxy statement should be consistent and aligned. The SEC staff will compare what your 10-Q says about tariff impacts against your earnings call transcript and investor day slides. Inconsistency is both a comment letter risk and a potential securities liability.

The Regulation FD dimension goes further. Under Regulation FD (Release Nos. 33-7881, 34-43154), when a company discloses material nonpublic information to securities market professionals or shareholders who may trade on it, simultaneous public disclosure is required for intentional disclosures, and prompt disclosure for non-intentional ones. Tariff impact information, specifically cost quantifications or supply chain details not yet in a public filing, is live Reg FD risk in analyst calls and investor meetings that precede a 10-Q filing.

A practical coordination checklist for IR and legal teams:

1. Draft the 10-Q tariff narrative first. All other communications derive from it.
2. Legal counsel reviews the earnings call script against the draft 10-Q before the call, line by line on tariff language.
3. IR flags any tariff-specific quantification discussed with analysts pre-filing for Reg FD review.
4. FP&A confirms that after-tax tariff cost figures in investor presentations use the permanent 21% rate and match the MD&A.
5. Disclosure committee sign-off on tariff language covers all public documents simultaneously, not just the 10-Q.
6. Last-minute policy change protocol: designate one person (typically the Controller or Chief Accounting Officer) to own the tariff disclosure update if policy changes materially in the final two weeks before filing.

For the broader cross-filing consistency framework, see Finrep's IR disclosure best practices playbook.

How to Benchmark Your Tariff Disclosures Against Peers

The most actionable research tool available is EDGAR itself, and almost no one uses it systematically for this purpose.

The SEC's Division of Corporation Finance makes filing review correspondence publicly available through EDGAR. Searching for tariff-related comment letters in your industry peer group gives you the most current and specific signal of what the staff is actually asking. KPMG's analysis shows that MD&A is the dominant location for tariff disclosures, followed by risk factors, then financial statement notes. If your disclosure architecture inverts that order, expect questions.

For large accelerated filers, the 40-day 10-Q deadline and higher staff scrutiny make tariff disclosure preparation more time-sensitive. Large accelerated filer status is determined by public float as of June 30, so companies now know their 2026 filing category and associated deadlines. For a systematic approach to EDGAR benchmarking, see Finrep's EDGAR benchmarking for SEC disclosures playbook.

Benchmark filings worth reviewing directly on EDGAR:

• NIKE, Inc. Form 10-K for fiscal year ended May 31, 2025: global supply chain + multi-risk integration approach
• Meta Platforms Form 10-K for fiscal year ended December 31, 2025: mega-cap approach to macroeconomic risk disclosure in Item 1A and Item 7

2026 Tariff Disclosure Checklist: Filing-Day Reference

Use this against your draft before the disclosure committee meeting.

Risk Factors (Item 105)

• Tariff language describes actual impacts, not hypothetical risks, if tariffs have already hit results
• Specific tariff regimes named (IEEPA, Section 301, retaliatory measures)
• Direct AND indirect effects addressed (supplier cost pass-throughs, demand shifts, contract delays)
• Standalone tariff risk factor or integrated narrative is internally consistent
• Enhanced cautionary language in forward-looking statement disclaimers specifically names tariff policy variability

MD&A (Item 303)

• Dollar or basis-point impact of tariffs quantified for the period
• Mitigation actions described with specificity (supplier diversification, pricing actions, contract renegotiations)
• Forward-looking guidance assumptions explicitly address tariff rate environment
• Dual-exposure companies address both import cost increases AND retaliatory tariff impacts on exports
• After-tax tariff cost figures use the permanent 21% corporate rate
• Segment-level tariff impacts addressed where material to one or more reportable segments (ASC 280)

Financial Statement Notes

• ASC 330: inventory valuation impact assessed and disclosed if material
• ASC 450 / ASC 410-30: IEEPA refund recognition decision made and documented with auditors
• ASC 740: tax provision note consistent with tariff cost narrative in MD&A
• ASC 205-40: going concern assessment updated for tariff-driven cost increases (particularly relevant for thin-margin companies)
• ASC 855: subsequent events reviewed for tariff refund receipts or material policy changes after period end

Item 7A (Market Risk)

• Foreign currency and tariff exposure interaction addressed for companies with both import and international revenue exposure

Cross-Filing Consistency

• Earnings release tariff language matches 10-Q MD&A
• Earnings call script reviewed against 10-Q draft before the call
• Investor presentation tariff slides consistent with filed disclosure
• No material tariff-specific quantifications shared with analysts before public filing (Reg FD)
• Non-GAAP tariff-adjusted metrics, if any, comply with Item 10(e) and 2016 non-GAAP C&DIs

FAQ

Is boilerplate tariff risk factor language still acceptable in Q2 2026? No. SEC staff comment letter activity and the peer benchmarking standard set by Fortune 500 filers in 2025 have moved the bar. If tariffs have materially affected your business, your risk factor must describe what happened, not what might happen. Generic language now draws comments.

Do tariff disclosures belong in financial statement notes or only in MD&A? Both, depending on the facts. KPMG's Q1 2026 analysis confirms a significant increase in tariff-related disclosures inside the financial statements. Inventory valuation (ASC 330), contingent liabilities (ASC 450), the IEEPA refund recognition question (ASC 410-30), and going concern (ASC 205-40) can all require note disclosure independent of MD&A.

Should we recognize a tariff refund receivable following the IEEPA Supreme Court ruling? This is a facts-and-circumstances judgment. Most Q1 2026 registrants have not recognized any benefit, citing uncertainty about timing and ultimate realization. A smaller subset has recognized receivables under ASC 410-30 with supporting disclosure. Work through the recognition criteria with your auditors before filing. Either way, disclose your conclusion and the basis for it.

Can we present "ex-tariff" adjusted earnings in our earnings release? The SEC's position stated at SEC Speaks 2026 is that non-GAAP adjustments designed to strip out tariff costs are likely not appropriate, as tariffs are recurring, cash-settled costs. If you include such a metric in an SEC filing, it must comply with Item 10(e) of Regulation S-K and the 2016 non-GAAP C&DIs, including a prominent GAAP reconciliation.

Does the One Big Beautiful Bill Act change how we disclose tariff costs? Yes, for after-tax figures. The Act made the 21% corporate rate permanent as of July 4, 2025. Any after-tax tariff cost disclosure in MD&A and the tax provision note under ASC 740 must use the permanent rate. Inconsistency between the two is an internal consistency problem the SEC staff will flag.

What is the Regulation FD risk around tariff disclosures? If you discuss specific tariff cost quantifications or supply chain details with analysts before those details appear in a public filing, you may be making a selective disclosure of material nonpublic information under Reg FD. Have legal counsel review any pre-filing analyst conversations that touch on tariff impacts not yet in a public document.

Do smaller reporting companies face the same tariff disclosure standards? The substantive obligation under Item 303 applies to all registrants. The SEC's proposed filer status simplification (published May 19, 2026) would expand the scaled-disclosure regime to over 80% of issuers, but that proposal is not yet final. Under current rules, smaller reporting companies and non-accelerated filers must still disclose known material tariff trends in MD&A, even if their quantitative thresholds and filing deadlines differ from large accelerated filers.