Disclosure of estimates and opinions, which are often referred to as ‘soft information,‘ has presented a number of difficult issues to courts, the Securities and Exchange Commission (SEC) and companies issuing offering materials or required to file periodic reports with the SEC. Although this type of information often consists of projections, historical financial statements also include this type of information to varying degrees. For example, a bank's statement of financial position requires specification of loan loss reserves and is therefore dependent on an assessment of future events (the timing and extent of repayment). Similarly, determination of the timing of a write-off of development costs will depend on the expectation of future sales. The disclosure issues raised by this type of information include the extent to which a company is permitted or even required to disclose this information and the scope of any liability arising from dissemination of the estimate or opinion.
Royce de R. Barondes, The Bespeaks Caution Doctrine: Revisiting the Application of Federal Securities Law to Opinions and Estimates, 19 J. Corp. L. 243 (1994)