Non-GAAP Reporting: Evidence from Academia and Current Practice

Forthcoming, Journal of Business Finance & Accounting

Tuck School of Business Working Paper No. 2966778

55 Pages Posted: 11 May 2017 Last revised: 11 Apr 2018

See all articles by Dirk E. Black

Dirk E. Black

University of Nebraska at Lincoln - School of Accountancy

Theodore E. Christensen

University of Georgia - J.M. Tull School of Accounting; University of Georgia

Jack T. Ciesielski

R.G. Associates

Benjamin C. Whipple

University of Georgia - C. Herman and Mary Virginia Terry College of Business

Multiple version iconThere are 2 versions of this paper

Date Written: May 11, 2017

Abstract

The number of firms reporting earnings on a non-GAAP basis has dramatically increased over the past decade, and non-GAAP reporting is now commonplace in capital markets. This proliferation of non-GAAP reporting has renewed both regulators’ and standard setters’ interest in these alternative performance metrics. For example, the SEC, FASB, and IASB have all recently questioned what this increasing reporting trend means for IFRS- and U.S.-GAAP-based reporting and whether these measures are misleading to investors. This increasing focus on non-GAAP metrics motivates us to synthesize the nearly two decades of research on non-GAAP reporting to provide insights on what academics have learned to date about this reporting practice. Then, we utilize a novel dataset of detailed non-GAAP disclosures to provide new descriptive evidence on current trends in non-GAAP reporting and its recent proliferation. Finally, we discuss important questions for future researchers to consider in moving the literature forward.

Keywords: Non-GAAP earnings, regulation, standard setting

JEL Classification: M40, M41, M48

Suggested Citation

Black, Dirk E. and Christensen, Theodore E. and Ciesielski, Jack T. and Whipple, Benjamin C., Non-GAAP Reporting: Evidence from Academia and Current Practice (May 11, 2017). Forthcoming, Journal of Business Finance & Accounting; Tuck School of Business Working Paper No. 2966778. Available at SSRN: https://ssrn.com/abstract=2966778 or http://dx.doi.org/10.2139/ssrn.2966778

Dirk E. Black (Contact Author)

University of Nebraska at Lincoln - School of Accountancy ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

Theodore E. Christensen

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States

University of Georgia ( email )

Athens, GA
United States

Jack T. Ciesielski

R.G. Associates ( email )

United States

Benjamin C. Whipple

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Brooks Hall
Athens, GA 30602-6254
United States

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