US Accounting Board to Examine Formalizing Non-GAAP Measures

US accounting standard-setters will take the first formal step this year to decide if they should write rules around the ubiquitous supplemental financial measures that typically boost a company’s official earnings.

The Financial Accounting Standards Board will ask the public by year-end whether it should define non-GAAP measures, or metrics that aren’t covered by US generally accepted accounting principles, FASB Chair Richard Jones said Tuesday at a meeting of the board’s parent body in Washington. Sending an invitation to comment is considered an early-stage step before taking action.

Measures such as free cash flow and EBITDA—earnings before interest, tax, ...