On May 17, 2016, the staff of the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued new and revised compliance and disclosure interpretations (CDIs) regarding the SEC’s rules and regulations on the use of non-GAAP financial measures. A copy of these CDIs is available here.
The issuance of these CDIs follows a number of public statements by SEC Chair Mary Jo White, SEC Chief Accountant James Schnurr and other SEC staff members about the staff’s renewed focus on companies’ use of non-GAAP financial measures. Copies of some of those statements are available here, here and here.
Companies should be particularly mindful of the requirements of the SEC’s rules applicable to the disclosure of non-GAAP financial measures (Item 10(e) of Regulation S-K; Regulation G) and the SEC staff’s guidance when preparing these disclosures.