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Adjusted or Non GAAP Accounting

Parent term
Accounting
Adjusted or Non GAAP accounting are accounting principles that companies use to offer a view of their business that may better reflect the companies actual performance than GAAP

Publications

Mind the GAAP

  • Main purpose is to increase share price - adjusted accounting is rarely worse than GAAP
  • More than 90% of Large public companies use alternative accounting (2018


Non-GAAP Accounting Criticisms

  • Allows companies to present financials in the way they want investor to see them (in favor of the company)
  • Make it easier for companies to hit their earnings
  • Make it more difficult to compare companies with each other
  • Can be used to mislead investors

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