The Ethical Reporting of Non-GAAP Performance Measures

Black, Ervin L.

doi:10.1590/1808-057x201690090

Cited by 12 publications

(11 citation statements)

References 13 publications

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“…In addition, he incorporates discussions of the academic literature with many valuable insights and informative references to international evidence. More recently, Black () provides a brief, yet insightful commentary on non‐GAAP reporting, while Marques () provides an additional review of the non‐GAAP reporting literature from an international perspective. Our objective is to provide a comprehensive review focused specifically on the academic research that examines non‐GAAP reporting (both in US‐based and international research).…”

Section: Regulatory Standard Setting and Academic Foundationsmentioning

confidence: 99%

Non‐GAAP reporting: Evidence from academia and current practice

Black

Christensen

Ciesielski

et al. 2018

Business Fin & Account

180

148

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The number of firms reporting earnings on a non-GAAP basis has increased dramatically over the last decade, and non-GAAP reporting is now commonplace in capital markets. This proliferation of non-GAAP reporting has renewed both regulators' and standard setters' interests in these alternative performance metrics. For example, the SEC, FASB, and IASB have all recently questioned what this increasing reporting trend means for IFRS-and US-GAAP-based reporting and whether these measures are misleading to investors. This increasing focus on non-GAAP metrics motivates us to synthesize the nearly two decades of research on non-GAAP reporting to provide insights on what academics have learned to date about this reporting practice. Then, we utilize a novel dataset of detailed non-GAAP disclosures to provide new descriptive evidence on current trends in non-GAAP reporting and its recent proliferation. Finally, we discuss important questions for future researchers to consider in moving the literature forward. K E Y W O R D Snon-GAAP earnings, regulation, standard setting INTRODUCTIONManagers, financial analysts, investors, lenders, compensation committees, and other stakeholders often evaluate a company's earnings performance using metrics other than GAAP-based net income. These stakeholders generally start with GAAP earnings and back out (or exclude) earnings components that they deem to be transitory or noncash. They argue that these excluded items are less relevant for assessing firm performance and that the "non-GAAP" performance number is more appropriate for their intended purposes. The growth in these non-GAAP metrics over the past 20 years reflects a widespread acceptance of non-standard performance metrics as a way to evaluate firm performance.Although skeptics have frequently viewed non-GAAP disclosure as a threat to the traditional GAAP-based income statement, regulators recognize that non-GAAP metrics can be informative to investors and have laid the groundwork for firms to disclose these metrics in a transparent manner. Standard setters and regulators have recently renewed J Bus Fin Acc. 2018;45:259-294. wileyonlinelibrary.com/journal/jbfa

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Section: Regulatory Standard Setting and Academic Foundationsmentioning

confidence: 99%

Non‐GAAP reporting: Evidence from academia and current practice

Black

Christensen

Ciesielski

et al. 2018

Business Fin & Account

180

148

View full text Add to dashboard Cite

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“…During earnings calls, corporate representatives and analysts share their expectations about the company's financial performance. In this context, managers can influence analyst expectations and decision-making (Black, 2016), but the interpretation of the information the company provides may differ between buy-side and sellside analysts (Yamamoto & Hirata, 2012).…”

Section: Introductionmentioning

confidence: 99%

Market Reaction to the Tones of Earnings Conference Calls

Tonin

Scherer

2022

Rev. adm. empres.

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RESUMO Este estudo tem como objetivo analisar os diferentes tons transcritos utilizados pelos participantes nas teleconferências de resultados e sua influência na geração de retornos anormais das ações. Este estudo preenche uma lacuna de pesquisa que é a segregação da análise do tom por tipo de analista e de representantes corporativos durante a teleconferência de resultados. A amostra abrangeu o período de 2010 a 2017, totalizando 1.165 transcrições de teleconferências de resultados de 44 empresas brasileiras listadas na B3 – Brasil, Bolsa, Balcão. O principal achado é que o tom transcrito e as palavras utilizadas com base no dicionário de Loughran e McDonald (2011) têm poder de previsão significativo sobre as reações do mercado de ações após as teleconferências de resultados.

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“…Nas teleconferências de resultado, além de informações, os representantes corporativos e analistas compartilham suas expectativas sobre o desempenho financeiro da companhia. Nesse contexto, os gestores podem influenciar as expectativas e a tomada de decisão dos analistas (Black, 2016), mas a interpretação das informações disponibilizadas pela companhia pode divergir entre os analistas buy-side e sell-side (Yamamoto & Hirata, 2012).…”

Section: Introductionunclassified