Taxand USA looks at the income tax implications of non-GAAP adjustments.
US stocks experienced substantial growth in 2016, with the Dow Jones Industrial Average reaching numerous historical milestones to close out the final quarter of the calendar year. Bolstered with a pro-business and growth message, post-election optimism is high for investors.
Concurrent with a perceived healthy climate for investing is an appetite for additional financial information to guide decision-making. While standardised, audited financial statements have been staples for investors since the Securities Act of 1933, there is increasing demand for non-GAAP financial measures as an additional indicator of a company’s present condition and potential future cash flows.
Discover more: Income tax implications of non-GAAP adjustments
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While the SEC confirms permissibility of non-GAAP financial measures with proper presentation and disclosure, care must be taken to ensure the proper treatment of income taxes.
