The Securities and Exchange Commission (SEC), in a series of recent letters, has asked some companies to explain performance metrics that go beyond generally accepted accounting principles (GAAP), and it is likely to approach more companies with similar questions, The Wall Street Journal reported.

The idea is to determine whether such metrics have the potential to mislead investors.

The SEC has monitored non-GAAP measures in financial statements, such as earnings before interest, taxes, depreciation and amortization (Ebitda), for years.  In 2016, the commission warned companies that replacing GAAP-based methods with non-GAAP ones—such as moving the timing of recognition of an expense or revenue from one period to another and depreciating operating leases instead of recording rent expenses—could violate its rules.

Late last year, the SEC updated its guidance on possible violations.

Some companies rely on non-GAAP measures in order to present an overly optimistic picture of profitability, accounting researchers told the Journal. A company’s earnings minus abnormal, nonrecurring items could lead investors to assume that the measures mean something else. "That’s what the SEC doesn’t want and why they’re not allowing each company to come up with their own definition of a non-GAAP measure,” Nick Guest, an assistant professor of accounting at Cornell University, told the Journal.

In letters released in January and February, the SEC questioned 20 companies about their compliance with the relevant section of the SEC’s guidance on non-GAAP financial measures, according to MyLogIQ, a data provider. That number may grow in the coming months due to some companies’ lack of awareness of the new guidance, accountants and academics told the Journal.

One such company, Lyft, was asked to explain about an adjustment to its Ebitda. In response, Lisa Blackwood-Kapral, Lyft’s chief accounting officer, wrote in September that “[t]he company believes that this adjustment … provides investors with additional useful information related to the company’s operating performance during the current period, rather than including the impacts associated with insurance claims which occurred in prior periods.”

The SEC responded in December to tell the company that the adjustment is inconsistent with its guidance on adjusted accounting, and to request the company to remove the adjustment from its non-GAAP calculations. Lyft said that it would reflect the change in future filings and did so on Feb. 9.

SEC sought more details on Graham Holdings’ adjusted net income, which it said appeared to apply a different basis of accounting than that of GAAP, prompting the company to say that it would expand its disclosure around the adjustments in future filings, while still defending its accounting.

Graham Holdings and Lyft declined to comment to the Journal. 

The SEC also questioned Sleep Number about its use of a non-GAAP measure known as return on invested capital (ROIC), which aims to show how efficiently it invests capital. Sleep Number also defended its practice, but will change how it computes ROIC and no longer make these adjustments, Chief Financial Officer David Callen wrote on Jan. 12. He subsequently left the company on Jan. 30, but his departure was unrelated to the inquiry, the company said.

Audit committees may scrutinize non-GAAP disclosures more closely before filing with the SEC as a result of these inquiries, H. David Sherman, an accounting professor at Northeastern University and former SEC academic fellow, told the Journal.

“From a CFO standpoint, their job is to show the company in as good a light as possible, but at the same time, you don’t want to go too far because that really can create suspicion,” he said.