The Determinants and Informativeness of Non-GAAP Revenue Disclosures

ABSTRACT Most research on non-GAAP financial measures focuses earnings or per share, although revenue disclosure has recently attracted SEC scrutiny. It is unclear ex ante what adjustments could improve revenue's usefulness because, unlike earnings, a top-line number related primarily to core (i.e., persistent) business activities. We present the first archival analysis of revenues using large, hand-collected sample disclosures from 2015 2018. Approximately one in five announcements contains disclosure, focused growth. Our evidence suggests that firms disclose when GAAP incomparable with prior periods, and not compensate for poor performance. Furthermore, growth predicts future better than growth, market responds this information. Overall, are motivated by economic fundamentals rather opportunism, average, they provide investors relevant