SEC Official Warns Against ‘Incomplete’ Business Unit Disclosure

Public companies need to ensure they’re telling investors in financial reports how their executives use certain segment profitability metrics in business analysis, an SEC official said Tuesday.

Securities and Exchange Commission staff have found “missing or incomplete” disclosures from companies applying updated accounting rules, Jarrett Torno, an associate chief accountant in the SEC’s division of corporation finance, said at an American Institute of CPAs event in Washington. The US rules aim to give investors further details on business segment-level expenses like advertising or the costs to sell products.

The Wall Street regulator has scrutinized this year the ...