Summary of SEC Rules Governing Use of Non-GAAP Financial Measures and Furnishing of Earnings Releases
By Robert R. Carlson, Michael Zuppone & Bijal Shah
The Securities and Exchange Commission issued Release No. 33-8176 in which it adopted rules, effective March 28, 2003, concerning the use by reporting companies of financial measures that do not involve the use of United States generally accepted accounting principles. These measures, which the SEC refers to as “non-GAAP financial measures,” are often used by reporting companies to highlight discrete aspects of their financial performance and their use has raised substantial concerns among members of Congress, regulators and investors.