Defining Issues | May 2016

SEC staff warns about non-GAAP financial measures

KPMG reports on SEC’s warning of prohibited practices in filings and press releases. SEC enforcement action will be taken against registrants that don’t comply with the rules on presenting non-GAAP financial measures.



  • SEC filers that disclose non-GAAP financial measures

Relevant dates

  • Effective immediately

Key impacts

  • Companies may have to revise or eliminate certain non-GAAP financial measures in filings and press releases, particularly those that include adjustments to revenue
  • Management should reassess the controls and oversight procedures that it applies to non-GAAP financial measures
  • Audit committees should pay close attention to non-GAAP financial measures, including related disclosures, and consider what measures are appropriate and reliable

Report contents

  • Misleading financial measures
  • Per share non-GAAP liquidity measures
  • Tax expense adjustments
  • Recent SEC and IASB comments
  • Non-GAAP financial measure disclosures



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