Pro forma's Bottom Line

摘要

In effect, the u.s. securities & exchange commission (SEC), the federal regulatory agency that polices the financial statements of publicly traded companies, will be slapping warning labels on many of the annual reports and quarterly earnings statements being issued during the next several weeks. Concerned that so-called pro forma presentation of financial information could mislead investors, the SEC six weeks ago pointedly reminded companies that the antifraud provisions of federal securities laws also apply to firms not reporting results according to U.S. GAAP, a traditional set of generally accepted accounting principles. Increasingly popular, especially among high-tech compa-nies, pro forma earnings reports present an "as if picture of a firm's financial status. Frequently, that means pro forma finan-cial statements leave out such things as restructuring charges and merger-related expenses, which, if reported, would lower earnings. However, in the financial world, pro forma earnings reporting has no standard definition and no consistent format.