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ACC504: Corporate Financial Reporting & Disclosure

Company research: GAAP vs. non-GAAP

This research guide is designed to introduce you to a range of resources for doing company research and to help you with your quality of earnings review project.

1. Read the Ciesielski & Henry article (linked below).

Ciesielski, J. T., & Henry, E. (2017). Accounting's tower of babel: Key considerations in assessing non-GAAP earnings. Financial Analysts Journal, 73(2), 34-50.

2. Choose a publicly traded company that has reported non-GAAP earnings at some point in the past 36 months. This is going to require some investigation on your part, but the Kilgore, Linnane, Marriner & McKenna article (linked below) provides a good starting point by listing 32 of the top 50 S&P 500 companies that are known to have reported non-GAAP earnings.

Kilgore, T., Linnane, C., Marriner, K., & McKenna, F. (2016, July 27). How the biggest companies in the S&P 500 use made-up earnings numbers.

3. Confirm that the company you've selected has reported non-GAAP earnings within the past 36 months.

  • Find the company's quarterly earnings report to confirm that it includes non-GAAP earnings. The company's website, letters to investors, and press releases are good places to look for a quarterly earnings report. Google, or another web search engine, is probably your best bet for finding quarterly earnings reports.
  • Companies use a variety of names to label non-GAAP earnings, such as:
    • Adjusted EPS
    • Adjusted EPS from continuing operations
    • Adjusted net EPS
    • Comparable EPS
    • Core EPS
    • EPS excluding certain items affecting comparability
    • GAAP earnings from continuing operations
    • Non-GAAP EPS
    • Operating non-GAAP EPS

2. Compare their non-GAAP earnings numbers to their GAAP earnings numbers.

  • Use EDGAR Company Filings (linked below) to find the company's 10-Q Form, a legal document filed quarterly with the Securities and Exchange Commission.
4. Cite your sources using APA style. Note: Be sure to use double spacing and hanging indents when citing sources in APA.
  • APA example for a quarterly earnings report from the company's website:

Alphabet, Inc. (2017). Alphabet announces second quarter 2017 results [Press release].

  • APA example for a 10-Q from SEC website:

Alphabet, Inc. (2017). Form 10-Q for the quarterly period ended June 30, 2017.