{"id":2349,"date":"2022-12-13T13:01:56","date_gmt":"2022-12-13T18:01:56","guid":{"rendered":"https:\/\/seci.wpenginepowered.com\/?p=2349"},"modified":"2022-12-13T13:02:01","modified_gmt":"2022-12-13T18:02:01","slug":"corpfin-updates-non-gaap-compliance-and-disclosure-interpretations","status":"publish","type":"post","link":"https:\/\/seciblog.pli.edu\/index.php\/corpfin-updates-non-gaap-compliance-and-disclosure-interpretations\/","title":{"rendered":"CorpFin Updates Non-GAAP Compliance and Disclosure Interpretations"},"content":{"rendered":"

On December 13, 2022, just in time for the holidays, CorpFin updated several non-GAAP measure Compliance and Disclosure Interpretations.\u00a0 You can find the CorpFin announcement here<\/a> and the updated C&DIs here<\/a>.\u00a0 C&DI Questions 100.01, 100.04 \u2013 100.06, and 102.10(a)(b)(c) were updated.\u00a0 All companies that use non-GAAP measures should review these updates.<\/p>\n

As an example, the old language of C&DI 100.01 read:<\/p>\n

Question 100.01<\/strong><\/p>\n

Question:\u00a0<\/strong>Can certain adjustments, although not explicitly prohibited, result in a non-GAAP measure that is misleading?<\/p>\n

Answer:\u00a0Yes. <\/strong>Certain adjustments may violate Rule 100(b) of Regulation G because they cause the presentation of the non-GAAP measure to be misleading. For example, presenting a performance measure that excludes normal, recurring, cash operating expenses necessary to operate a registrant\u2019s business could be misleading. [May 17, 2016]<\/p>\n

The update expands the discussion of what might make an adjustment misleading.\u00a0 The changed language is in bold below:<\/p>\n

Question 100.01<\/strong><\/p>\n

Question:\u00a0<\/strong>Can certain adjustments, although not explicitly prohibited, result in a non-GAAP measure that is misleading?<\/p>\n

Answer:<\/strong>\u00a0Yes. Certain adjustments may violate Rule 100(b) of Regulation G because they cause the presentation of the non-GAAP measure to be misleading. Whether or not an adjustment results in a misleading non-GAAP measure depends on a company\u2019s individual facts and circumstances.<\/strong><\/p>\n

Presenting a non-GAAP performance measure that excludes normal, recurring, cash operating expenses necessary to operate a registrant\u2019s business is one example of a measure that could be misleading.<\/strong><\/p>\n

When evaluating what is a normal, operating expense, the staff considers the nature and effect of the non-GAAP adjustment and how it relates to the company\u2019s operations, revenue generating activities, business strategy, industry and regulatory environment.<\/strong><\/p>\n

The staff would view an operating expense that occurs repeatedly or occasionally, including at irregular intervals, as recurring. [December 13, 2022]<\/strong><\/p>\n

As always, your thoughts and comments are welcome!<\/p>\n","protected":false},"excerpt":{"rendered":"

On December 13, 2022, just in time for the holidays, CorpFin updated several non-GAAP measure Compliance and Disclosure Interpretations.\u00a0 You can find the CorpFin announcement here and the updated C&DIs here.\u00a0 C&DI Questions 100.01, 100.04 \u2013 100.06, and 102.10(a)(b)(c) were updated.\u00a0 All companies that use non-GAAP measures should review these updates. As an example, the … Continue reading CorpFin Updates Non-GAAP Compliance and Disclosure Interpretations<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[143,242],"tags":[],"coauthors":[154],"class_list":["post-2349","post","type-post","status-publish","format-standard","hentry","category-hot-topic","category-reporting"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/comments?post=2349"}],"version-history":[{"count":0,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/posts\/2349\/revisions"}],"wp:attachment":[{"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/media?parent=2349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/categories?post=2349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/tags?post=2349"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seciblog.pli.edu\/index.php\/wp-json\/wp\/v2\/coauthors?post=2349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}