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Financial Reporting and Regulatory Update

First Quarter 2018

From the CAQ

Non-GAAP Measures

On March 16, 2018, the CAQ released a new tool, “Non-GAAP Measures: A Roadmap for Audit Committees,” that public company audit committees can use to enhance their oversight of management’s use of non-generally accepted accounting principles (non-GAAP) measures. The road map includes themes that came up during a series of roundtables in 2017. It also presents leading practices for assessing whether a company’s use of non-GAAP measures provides a balanced perspective of its performance. When presented appropriately – that is, when they are transparent, consistent, and comparable to measures disclosed by other companies – information about non- GAAP measures is useful to investors.

To add context and give some real-life examples, the CAQ also released a companion video featuring interviews with audit committee chairs.