SEC Releases New Guidance on Non-GAAP Financial Measures

On May 18, 2016, the firm published an alert titled “SEC Releases New Guidance on Non-GAAP Financial Measures.”

On May 17, 2016, the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) released new and updated Compliance and Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures (“NGFMs”). The release of the C&DIs follows a series of recent speeches by SEC Chair Mary Jo White, Chief Accountant James Schnurr and other staff that expressed concerns over prevalent and liberal use of NGFMs. The C&DIs signal a tightening of the SEC’s policy toward NGFMs and renewed SEC focus on their use.  This alert memo discusses one new C&DI relating to adjusted revenue measures that deserves special attention.