Course · Act IV: Earnings Season · Chapter 22
GAAP vs. non-GAAP earnings
GAAP vs. adjusted (non-GAAP) earnings: what companies add back, how to read the reconciliation, and when adjustments are a warning sign.
Key terms
- GAAP
- Generally Accepted Accounting Principles: the US rulebook for financial statements.
- Non-GAAP / adjusted
- Company-defined measures excluding chosen items. Must be reconciled to GAAP.
- Reconciliation
- The table showing exactly what was added back to get from GAAP to adjusted.
“GAAP vs. “Adjusted”” is part of the full course: 4 puzzles on gaap vs. non-gaap earnings, with a story that carries through all five acts. Try this act’s free chapter, “Anatomy of a Report”, first.