SEC Cautions Against Adjusting Revenue to Blunt Covid Impact

Companies that try to paint a rosier picture of their performance by adjusting non-GAAP metrics for revenue that they would have earned if not for the pandemic disruptions will raise questions with U.S. regulators.

Securities and Exchange Commission staff have found a range of pandemic-based adjustments to non-GAAP disclosures over the last few months. “Some were fine, and some start to push the envelope,” Bill Hinman, Corporation Finance director at the agency, said in an interview with the Center for Audit Quality released Thursday.

“Adding back revenue that was lost due to Covid is a very subjective, difficult process to ...