This report reviews recently released U.S. Securities and Exchange Commission (SEC) comment letters related to the use of non-generally accepted accounting principles (non-GAAP) financial measures in mandated financial reporting for U.S. publicly traded companies.

To help provide compliance guidance, this report provides excerpts of SEC staff comment letters related to topics discussed as questions in the SEC’s Compliance & Disclosure Interpretations (“C&DIs”) for Non-GAAP Financial Measures, which was last updated on December 13, 2022.

Some of our key findings were:

• Of the 43 issues raised in the non-GAAP CD&Is, 18 were the subject of comment letters released between January 2022 and May 2023.
• Prominence of non-GAAP measures was the top comment letter topic, making up one-third of all non-GAAP comment letters.
• Recurring expenses was the second most frequent topic of comment letters at 20%.
• Individually tailored accounting measures was the third most prevalent topic at 16%.