Reporting and Disclosures Using Non-GAAP Financial Measures

Josef Rashty, CPA, and John O'Shaughnessy, PhD, CPA (inactive)

Public companies provide information to investors and other market participants in many different ways, including SEC filings (e.g., annual and quarterly reports), company websites, earnings releases, investor calls, and analyst presentations. Such companies frequently use non-GAAP financial measures to communicate such important information to the public. As a result, there is a large volume of non-GAAP financial information circulating outside the SEC filing system, even though the SEC does not discourage companies from disclosing important non-GAAP information in their SEC filings—particularly when nondisclosure could lead to an inconsistency in how a company portrays its business in its SEC filings versus communications outside the SEC filing system.