SEC Maintains Its Focus on Non-GAAP Financial Measures
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- Non-GAAP financial measures remain a significant focus of the U.S. Securities and Exchange Commission (the “SEC”), exemplified by new and revised Compliance and Disclosure Interpretations (“C&DIs”) issued in December 2022, frequent SEC staff comment letters in recent years and enforcement actions, including one settled in March 2023.
- Issuers should regularly review their use of non-GAAP measures for compliance with guidance issued by the staff of the SEC’s Division of Corporation Finance—including the new and revised C&DIs.
- Issuers should also establish and maintain effective disclosure controls and procedures that address their use of non-GAAP financial measures.