2024 SEC comment letter trends: Non-GAAP measures

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This final episode of our 2024 SEC comment letter podcast miniseries discusses non-GAAP measures. Non-GAAP measures are commonly used by companies as supplements to their financial statements to deepen investors’ understanding of their performance or financial condition. Given their importance, not only does non-GAAP top the list this year, but it’s been a top focus area for the SEC staff in the last several years, and we expect that trend to continue. We discuss the issues most frequently raised by the SEC staff and offer advice to preparers for getting ahead of them.
In this episode, we discuss:

• 3:11 – Overview of non-GAAP comment letter trends
• 9:09 – Insights into comments on basic compliance areas
• 22:24 – Individually tailored accounting principles
• 27:27 – Adjustments for cash operating expenses that are normal and recurring
• 41:17 – Controls over non-GAAP measures
• 46:12 – Advice and other considerations when responding to comment letters
• 51:38 – Potential post-election impacts on the SEC

For more information, see our full analysis of SEC comment letter trends and our publication Earnings with a twist: 2024 update on SEC non-GAAP comment trends. Also, check out our other episodes in this miniseries.

Kevin Vaughn is a PwC National Office partner specializing in SEC reporting matters. Kevin leverages his extensive experience to support PwC public company and pre-IPO clients on accounting and SEC reporting matters. Prior to joining PwC in 2023, Kevin spent over 18 years at the SEC, most recently serving on the leadership team in the SEC’s Office of the Chief Accountant where he focused on technical accounting consultations, SEC rulemakings, and standard setting matters.
Lindsay McCord is a PwC National Office partner specializing in matters related to the SEC and the capital markets. Prior to joining PwC, Lindsay spent over 15 years at the SEC, most recently as the Chief Accountant in the Division of Corporation Finance. In this role, Lindsay led an accounting team in providing technical accounting and reporting support to the Division, including SEC rulemaking, interpretation, and guidance.
Kyle Moffatt is PwC’s Professional Practice leader, leading a team responsible for working with standard setters and regulators as well as delivering brand-defining thought leadership and educational materials. He also consults with engagement teams and audit clients on SEC reporting matters. Before PwC, Kyle spent almost 20 years with the SEC, most recently as Chief Accountant and Disclosure Program Director in the Division of Corporation Finance.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [e-mail].

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1. 2024 SEC comment letter trends: Non-GAAP measures (00:00:00)

2. Overview of non-GAAP comment letter trends (00:03:11)

3. Insights into comments on basic compliance areas (00:09:09)

4. Individually tailored accounting principles (00:22:24)

5. Adjustments for cash operating expenses that are normal and recurring (00:27:27)

6. Controls over non-GAAP measures (00:41:17)

7. Advice and other considerations when responding to comment letters (00:46:12)

8. Potential post-election impacts on the SEC (00:51:38)