Earlier this year, the Securities and Exchange Commission updated its guidance on the use of non-Generally Accepted Accounting Principles financial measures. Based on the revised guidance, the SEC appears to have changed its tone on the use of non-GAAP financial measures, most notably in SEC filings. From the updated guidance, companies may be inclined to disclose more non-GAAP financial measures so long as they comply with the SEC disclosure requirements.
This is an interesting turn of events, especially since the first Regulation G non-GAAP SEC case came out just a few months earlier. This article will highlight the non-GAAP disclosure requirements according to Regulation G and Item 10(e) of Regulation S-K and the updated 2010 SEC guidance on the use of non-GAAP financial measures.
