Washington (Oct. 31, 2002) -- The U.S. Securities and Exchange Commission unanimously approved a proposal that would prohibit companies from failing to explain how "pro-forma" financials differ from results obtained via generally accepted accounting principles.
Pro-forma results omit various costs and one-time charges, which can make a company appear more profitable than it actually is.
The SEC sent the rule out for public comment and the regulator expects it to be finalized in a few months.
At its meeting Wednesday, the regulator also voted 5-0 for a measure that would require companies to publicly disclose more information about off-balance sheet partnerships— vehicles which bankrupt energy provider Enron used to mask millions in debt.
Another proposal expected to sail through a Commission vote would prevent executives from selling company stock during "black-out periods," when employees in company pension funds are not allowed to sell their shares.
--Electronic Accountant Newswire staff
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