Non‐GAAP Reporting: Evidence from Academia and Current Practice

36 Pages Posted: 17 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: March/April 2018

Abstract

The number of firms reporting earnings on a non‐GAAP basis has increased dramatically over the last decade, and non‐GAAP reporting is now commonplace in capital markets. This proliferation of non‐GAAP reporting has renewed both regulators’ and standard setters’ interests 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 US‐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

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 (March/April 2018). Journal of Business Finance & Accounting, Vol. 45, Issue 3-4, pp. 259-294, 2018. Available at SSRN: https://ssrn.com/abstract=3163911 or http://dx.doi.org/10.1111/jbfa.12298

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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