CFO Intelligence Magazine – Fall 2024
Mark D. Mishler
MBA, CPA, CMA
CFOs need to apply judgment when identifying criteria for these terms, based on the facts and circumstances, expense nature, and impact on the company’s strategy, operations, revenue-generating activities, and regulatory environment. Based on SEC comment letters, generally the SEC views past expense timing that occurred occasionally at irregular intervals in prior periods to be normal or recurring. In addition, expenses expected to occur over future periods may also be considered normal and recurring.
- Non-GAAP financial measures should not be presented on the face of a GAAP financial statement or in the footnotes
- CFOs should be wary of non-GAAP titles that are the same as, or confusingly similar to, GAAP titles
Some examples of appropriate individually tailored accounting principles include:
- Key performance indicators that support management’s ability to evaluate operational performance, make operating decisions, and monitor progress toward achieving its operational and strategic goals