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Chapter 2 — What Is a Non-GAAP Measure?

2.5 Financial Measures Required by GAAP — Segment Information

2.5 Financial Measures Required by GAAP — Segment Information

The Rules prohibit the disclosure of non-GAAP measures on the face of or in the footnotes to the financial statements.2 However, financial measures that a registrant is required to disclose under GAAP (such as the ASC 280 segment information regarding revenue, profit or loss, and total assets) are not considered non-GAAP measures in the application of the Rules even if they would otherwise meet the definition of non-GAAP measures. The most common examples of such measures are related to segment profitability measures such as adjusted EBITDA for each reportable segment.3

Footnotes

2
See Section 4.1 for a list of prohibitions, including the prohibition against presenting “non-GAAP financial measures on the face of the registrant’s financial statements prepared in accordance with GAAP or in the accompanying notes.”
3
See also footnote 19 of the Release, which states that ASC 280 “requires that companies report a measure of profit or loss and total assets for each reportable segment. This tabular information is presented in a note to the audited financial statements and is required to be reconciled to the GAAP measures, with all significant reconciling items separately identified and described. A registrant is required to provide a Management’s Discussion & Analysis of segment information if such a discussion is necessary to an understanding of the business. Such discussion would generally include the measures reported under [ASC 280].”
4
As discussed in Section 4.4.2 of Deloitte’s Roadmap Segment Reporting, in certain instances, a CODM may use multiple measures of profit or loss or assets. In such cases, the measures presented should be those that most closely reflect the measurement principle applied to the consolidated financial statements.
5
See also Section 6.4 of Deloitte's Roadmap Segment Reporting for considerations related to SEC guidance on non-GAAP measures.