7, 1981, unless otherwise noted. Reg. When an issuer uses a non-GAAP measure in its earnings releases and other SEC filings, the GAAP measure should be of equal or greater prominence than the non-GAAP measure. Regulation G requires public companies that disclose or release non-GAAP financial measures to include a presentation of the most directly comparable GAAP financial measure and a reconciliation of the disclosed non-GAAP financial measure to the most directly comparable GAAP financial measure in that disclosure or release. The most significant incremental requirement applicable to earnings releases under Item 10 (e) (1) (i) of Regulation S-K not applicable to earnings calls is the requirement to provide equal or greater prominence to the GAAP measure. The equal or greater prominence rule applies to SEC filings and to communications, such as the earnings release, that are furnished to the SEC under Item 2.02 of Form 8-K. It does not apply to communications that are not filed or furnished at all or that are furnished under Item 7.01 of Form 8-K. Question: Item 10(e)(1)(i)(A) of Regulation S-K requires that when a registrant presents a non-GAAP measure it must present the most directly comparable GAAP measure with equal or greater prominence. An essential step toward becoming a public company is filing with the SEC for the first time.

Regulation G is intended to implement the requirements of the Sarbanes-Oxley Act. Specifically, Regulation G is intended to provide investors with balanced financial disclosure when non-GAAP financial measures are presented. 12 CFR 226.24 - Advertising.

The meaning of greater or equal prominence is a point of contention. The US Securities and Exchange Commission (SEC) recently gave a strong reminder of the importance of providing equal or greater prominence to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP) in disclosures containing non-GAAP financial measures. as to the item 10(e) requirement that a registrant present the most directly comparable gaap measure with equal or greater prominence whenever it presents a non-gaap measure,[6] c&di 102.10 previously stated only that presenting a full non-gaap income statement for purposes of reconciling non-gaap measures to the most directly comparable gaap GAAP presentation of information must have equal or greater prominence than non-GAAP financial measures. The Interpretations apply to the use of non-GAAP information under both Regulation S-K and Regulation G. Presentation in Filings and Releases. shall be disclosed with equal prominence and in close proximity to any advertised rate that triggered the required disclosures. While Regulation G requires that a non-GAAP financial measure is accompanied by disclosure of the most comparable GAAP financial measure, Item 10(e) of Regulation S-K also calls for the most comparable GAAP measure to be given equal or greater prominence in the relevant SEC filing. (3) shall be disclosed with equal prominence and in close proximity to any advertised payment that triggered the Takeaways. Item 10 (e) of Regulation S-K requires that when a registrant presents a non-GAAP financial measure, it must include a presentation, with equal or greater prominence, of the most directly comparable financial measure or measures calculated and presented in Disclosure of the reasons why non-GAAP measures provide useful information to investors is required.

Excluding a quantitative reconciliation with respect to a forward-looking non-GAAP measure in reliance on the unreasonable efforts exception in Item 10(e)(1)(i)(B) of Regulation S-K without disclosing that fact and identifying the information that is unavailable and its probable significance in a location of equal or greater prominence; and It is a friendly reminder to companies that disclose non-GAAP financial measures in earnings releases that the requirement to give equal or greater prominence to GAAP financial measures generally also applies to percentages and ratios calculated using a non-GAAP financial measure. Which of the following is outlined by Regulation G? sures are included in a location of greater or equal prominence. The SEC continues to focus on noncompliant use of non-GAAP financial measures, including in earnings releases. regulation g applies to any entity that is required to file reports pursuant to sections 13 (a) or 15 (d) of the exchange act, other than a registered investment company. GAAP measures should be presented with the same or greater prominence than non-GAAP measures under Item 10 (e) of Regulation S-K. may be disclosed with greater prominence than the other information. As you know, Reg S-K Item 10(e) and Reg G require a company that uses a non-GAAP financial measure to present the comparable GAAP measure with equal or greater prominence and to provide a reconciliation of the non-GAAP 13 regulation g applies whenever such a registrant, or a person acting on its behalf, discloses publicly or releases publicly any material information that includes a non-gaap Prominence Under Item 10(e), if a registrant presents a non-GAAP measure, it should present the most directly comparable GAAP measure with equal or greater prominence. Before the SEC staffs May 2016 updates to the C&DIs, there was no formal guidance interpreting this requirement and, as a result, diversity developed in practice. However, many foreign private issuers seek to comply with these The differences between Item 10 and Regulation G are small, but important, with the difference that comes into play most often being the requirement under Item 10(e) that a GAAP number be given equal or greater prominence compared to the comparable non-GAAP measure. Although there isnt much formal guidance for the SEC requirement to present a comparable GAAP measure with equal or greater prominence, companies should use common sense to avoid raising issues with the SEC. In connection with this action, the Director of the SECs Philadelphia Regional Office warned issuers that the lack of equal or greater prominence for GAAP measures is As discussed in this PubCo post, an analysis from Audit Analytics showed that the percentage of companies that received staff comments with regard to the issue of the presentation of GAAP measures with equal or greater prominence fell from 37.6% in the last six months of 2016 to 22.1% in the first six months of 2018. If the financial and other statistical information includes a non-GAAP financial measure, the additional disclosures required by Regulation G must be furnished: A presentation of the most directly comparable GAAP financial measure, giving equal or greater prominence to the GAAP measure to which the non-GAAP measure relates; and , it must present the most directly comparable GAAP measure with equal or greater prominence.

equal or greater prominence Providing discussion and analysis of a non-GAAP measure without a similar discussion and analysis of the comparable GAAP measure in a location of equal or greater prominence New Guidance for Non-GAAP Financial Measures in SEC Filings This guidance applies to Item 10(e) of Regulation S-K. In connection with this action, the Director of the SECs Philadelphia Regional Office warned issuers that the lack of equal or greater prominence for GAAP measures is a practice that we will continue to focus upon. This action is the first concerning the requirement that comparable GAAP financial measures be presented with equal or greater prominence with non-GAAP financial measures. Reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures is excluding a quantitative reconciliation with respect to a forward-looking non-GAAP measure using the unreasonable efforts exception in Item 10(e) of Regulation S-K, without disclosing that fact and identifying the information that is unavailable and its probable significance in a location of equal or greater prominence; and Non-GAAP Financial Measures. Item 10(e) of Reg S-K requires the most directly comparable GAAP measure to be given greater or equal prominence when reporting non-GAAP data. Registrants that are considering presenting non-GAAP measures should be aware of the SECs rules in Regulation G and Regulation S-K Item 10(e) and the SEC staff Compliance and Disclosure Interpretations on non-GAAP measures. Item 10(e)(1)(i)(A) of Regulation S-K requires that a presentation in an SEC filing of a non-GAAP financial measure must be accompanied, Form 8-K filed May 5, 2016 Exhibit 99.1 Failure to present GAAP financial measures with equal or greater prominence to non-GAAP measures results in cease-and-desist order and Enhanced Content - Details. PART 226 - TRUTH IN LENDING (REGULATION Z) Subpart C - Closed-End Credit 226.24 Advertising. GAAP measures under Regulation G, which do not include the equal or greater prominence requirement, have an exemption that is typically available for an earnings release of a foreign private issuer listed outside the United States that does not report under U.S. GAAP. Regulation G and Item 10(e) of Regulation S-K, the rules that govern the use of non-GAAP financial measures in public companies external communications and SEC filings, were first adopted in 2003. (Select all that apply) GAAP presentation of information must have equal or greater prominence than non-GAAP financial measures. to comply with item 10(e) of regulation s-k, the registrant must include the following in its sec filing: a presentation, with equal or greater prominence, of the most directly comparable financial measure or measures calculated and presented in accordance with gaap; a quantitative reconciliation of the differences between the non-gaap In other words, in an SEC This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SECs enforcement posture in the context of the SECs concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures. As such, earnings releases are subject both to Regulation G and Item 10 (e) (1) (i) of Regulation S-K. The US Securities and Exchange Commission (SEC) recently gave a strong reminder of the importance of providing equal or greater prominence to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP) in disclosures containing non-GAAP financial measures. Which of the following is outlined by Regulation G? (Select all that apply) Multiple select question. Z, 46 FR 20892, Apr. Excluding a quantitative reconciliation with respect to a forward-looking non-GAAP measure in reliance on the unreasonable efforts exception in Item 10 (e) (1) (i) (B) without disclosing that fact and identifying the information that is unavailable and its probable significance in a location of equal or greater prominence; and regulation g: all public disclosures that contain non-gaap financial measures by any registrant that has a class of securities registered under the exchange act or is required to file reports pursuant to the exchange act are subject to regulation g, including press releases, investor presentations and conference calls, whether such disclosure is SEC Regulations to Prevent Misleading Investors.

Both Regulation G and Item 10(e) require companies to provide 2 It is important to note that the equal or greater prominence requirement in Item 10(e) only applies to filings made with the SEC, as well as earnings releases furnished to the SEC pursuant to Item 2.02 of Form 8-K. While broader in scope than Item 10 (e), Regulation G is more limited in its requirements regarding a registrants disclosure of non-GAAP financial measures. In order to comply with Regulation G, whenever a registrant makes public a non-GAAP financial measure, it must: Findings The first mandatory statement that your company must file with the SEC is Form S-1 1 (the S-1), which is the beginning of a long list of filings required of public companies. In its recent enforcement action, the SEC found that ADT Inc., an NYSE-listed company, had violated the equal or greater prominence requirement in two routine earnings releases, each of which the company had furnished under Item 2.02 of Form 8-K. Observing the prominence requirement in all filings and public statements ensures consistency in investor communications and may also avoid undue prominence of a non-GAAP measure that is deemed to be misleading in violation of Regulation G. Staff Guidance on the Prominence Requirement. SEC filings must adhere to a strict set of rules governing what a company can include.