Mentor Graphics Corporation, a supplier of electronic design automation systems, just announced its second quarter results. According to the earnings
There is no standard definition of non-GAAP earnings. Each firm is permitted to construct its own definition for press release purposes. As a result, the Securities and Exchange Commission requires firms such as Mentor Graphics to provide a reconciliation of GAAP and non-GAAP earnings any time a non-GAAP measure is presented.
1. Which of the excluded items represent ongoing costs of running the business and which are one-time “special” costs?
2. How might analysts and investors benefit when firms call attention to their non-GAAP earnings?
3. How might analysts and investors be harmed?
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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Question Posted: September 10, 2014 09:37:10