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Article: Pro forma earnings are alive and well: SEC regulations haven't stopped companies from putting their best numbers forward.(Finance)(Securities & Exchange Commission)
- Article from:
- Electronic Business
- Article date:
- January 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 Reed Business Information, Inc. (US). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Although most companies are sticking to the letter of a regulation designed to curb the abuse of pro forma earnings numbers, some are not adhering to the spirit of the two-year-old rule, say analysts.
Pro forma numbers are financial metrics that deviate from Generally Accepted Accounting Principles (GAAP). They typically exclude certain costs that the company deems to be one-time or unusual events, such as restructuring charges, or that are noncash charges, such as amortization. These exclusions usually raise net income and earnings-per-share numbers. As more and more technology companies started using pro forma numbers over the last decade, the practice became ...