April 17, 2023
On April 12, 2023, Cravath prepared a memo for its clients entitled “SEC Continues To Focus on Non‑GAAP Measures: Updated SEC Staff Guidance and Recent Enforcement Action.” The memo examines the U.S. Securities and Exchange Commission’s continued focus on disclosure controls and procedures related to non‑GAAP financial measures. The memo outlines new and revised Compliance and Disclosure Interpretations and a recent enforcement action taken against an issuer for making misleading disclosures of non‑GAAP measures over several reporting periods. The memo concludes that the recent trends indicate that the SEC and its staff expect heightened rigor and compliance with the rules around non‑GAAP measures, and provides recommendations for companies with respect to their presentation of and controls around non‑GAAP measures.
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