Non-GAAP Earnings: International Overview and Suggestions for Research

31 Pages Posted: 11 May 2017

See all articles by Ana Cristina Marques

Ana Cristina Marques

Norwich Business School - University of East Anglia

Date Written: May 10, 2017

Abstract

The purpose of this paper is to synthesize insights from existing research on the disclosure of non-GAAP earnings, from an international point of view, and suggest several avenues for future research in this area. The paper also examines how different regulators and accounting standard setters have approached the topic of non-GAAP earnings disclosure. The paper shows how non-GAAP earning have been found to be more informative than GAAP earnings in several scenarios (countries where non-GAAP disclosures are compulsory, countries where these disclosures are voluntary but regulated and countries where they are not regulated). However, in certain circumstances, these disclosures may also mislead investors. Corporate governance mechanisms can curb managers’ opportunistic use of these measures.

Keywords: non-GAAP earnings, pro forma earnings, alternative performance measures, headline earnings.

JEL Classification: M41

Suggested Citation

Marques, Ana Cristina, Non-GAAP Earnings: International Overview and Suggestions for Research (May 10, 2017). Available at SSRN: https://ssrn.com/abstract=2965976 or http://dx.doi.org/10.2139/ssrn.2965976

Ana Cristina Marques (Contact Author)

Norwich Business School - University of East Anglia ( email )

Norwich
NR4 7TJ
United Kingdom

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