SEC Official Eyes Metrics Firms Use in Business Line Accounting

The US Securities and Exchange Commission is scrutinizing the first batch of companies’ annual financial reports that adopt updated accounting rules for segment reporting, which let them disclose more than one profit measure for their business lines—including unofficial metrics.

Companies reporting these metrics in their segment footnotes need to follow commission guidance for those measures that are outside the accounting rulebook, Heather Rosenberger, chief accountant for the agency’s division of corporation finance, said Tuesday at the Practising Law Institute’s SEC Speaks event.

Companies began applying the new accounting in annual reports issued earlier this year. SEC staff have sent ...