Mounting Accounting Adjustments Trigger SEC Guidance Updates

The Securities and Exchange Commission released written guidance Tuesday to help companies avoid future questions from the regulator over accounting adjustments that strip out recurring costs or that could confuse investors because of how they are labeled.

Staff guidance from the Division of Corporation Finance covers non-GAAP measures—metrics that depart from generally accepted accounting principles—which are a top source of SEC comment letters.

“There’s no amount of disclosure that can cure a misleading measure,” Lindsay McCord, chief accountant for the division, said at an American Institute of CPAs conference in Washington Tuesday.