Washington (Jan. 16, 2003) -- The Securities and Exchange Commission approved new rules Wednesday that would bar companies from reporting "pro-forma" financial results without showing the difference between pro-forma financials and those that conform to GAAP.
Under the new mandate, any earnings-related press release must be copied to the SEC – even those that don’t include pro-forma results.
A target of regulators over the past several years, pro-forma results strip out many one-time charges and costs, thereby giving an appearance that a company’s financials are healthier than they actually are.
The SEC last year sent out a warning to investors to view pro-forma numbers "with healthy skepticism."
-- Electronic Accountant Newswire staff
