What happened to Regulation G, the SEC rule intended to stop companies touting EBABS, or “Earnings Before All The Bad Stuff?”
The regulation, adopted in January 2003, applies whenever a company publicly discloses a non-GAAP financial measure. All such disclosures must include a quantitative reconciliation of the differences “between the non-GAAP financial measure presented and the comparable financial measure or measures calculated and presented in accordance with GAAP.“ In addition to a GAAP reconciliation schedule, the disclosure must be clear; it cannot include a misstatement or omission that might be misleading.
