Improper use of non-GAAP measures remains an area of concern for SEC staff, the commission’s deputy chief accountant noted at a recent conference.
Specifically, the SEC is encountering problems with the prominence of non-GAAP measures, improper labeling and presentation of non-GAAP measures as metrics, or vice versa.
SEC rules require that when an issuer presents a non-GAAP measure, they must report the most directly comparable GAAP measure with equal or greater prominence. Consider these tips.