Small Cap Financial Reporting: Determinants of Emphasis and Placement of Non-GAAP Disclosures

Posted: 27 Jan 2017

See all articles by Linda Campbell

Linda Campbell

Texas State University - San Marcos

Dennis M. Lopez

University of Texas at San Antonio

Date Written: October 2010

Abstract

This study examines the determinants of emphasis on non-GAAP disclosures in the earnings announcements of small cap companies. Two proxies of non-GAAP information emphasis are investigated — placement of the first non-GAAP disclosure and placement of the non-GAAP to GAAP reconciliation required by Regulation G. Using hand-collected data from fourth quarter press releases, we find evidence indicating that small cap firms place a higher level of emphasis on non-GAAP financial measures when GAAP earnings suggest lower value-relevance and when their shares are owned by a higher proportion of institutional investors. We also find that small cap companies decrease the level of emphasis placed on non-GAAP information as their listing tenure increases.

Keywords: Earnings Announcements, Non-GAAP Disclosures, GAAP Reconciliation, Regulation G

JEL Classification: M40, M41, M42

Suggested Citation

Campbell, Linda and Lopez, Dennis M., Small Cap Financial Reporting: Determinants of Emphasis and Placement of Non-GAAP Disclosures (October 2010). Research in Accounting Regulations, Vol. 22, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=2906482

Linda Campbell

Texas State University - San Marcos ( email )

San Marcos, TX 78666-4616
United States

Dennis M. Lopez (Contact Author)

University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-4320 (Phone)
210-458-4322 (Fax)

HOME PAGE: http://business.utsa.edu/

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