A rating system to evaluate non-GAAP exclusion quality

• Main Authors: DECHOW, Patricia M., LOH, Wei Ting, WANG, Annika Yu
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: Analyst Forecast Dispersion; on-GAAP Exclusion Quality; Non-GAAP Reporting; Recurring Expenses; Regulation G; SEC Comment Letters; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/2054; https://ink.library.smu.edu.sg/context/soa_research/article/3081/viewcontent/s11142_024_09855_3_pvoa_cc_by.pdf
• Institution: Singapore Management University

We develop a rating system to evaluate the quality of individual non-GAAP exclusions. Our perspective is that high-quality exclusions reflect nonrecurring economic transactions, are transitory accounting adjustments, or have little usefulness in forecasting cash flows. We use four approaches to rate...