It is well documented that companies now use social media for all kinds of communications, including “traditional” SEC disclosures. As the scope of the social media disclosures continues to expand, some companies are starting to post non-GAAP financial measures. It is important to remember that any such postings must comply with the SEC’s GAAP reconciliation rules. The question then becomes how?
General GAAP Reconciliation Requirements…
The SEC’s Regulation G requires that any time a company publically discloses non-GAAP financial measures, it must provide a reconciliation of those measures to the most directly comparable GAAP number. The SEC has made special allowances for oral, telephonic, webcast or similar disclosures by allowing companies to meet the reconciliation delivery requirement by referring listeners to a reconciliation posted on the company’s website. There is no analogous rule allowing social media postings to reference or link to the website.
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