Final answer:
Non-GAAP metrics are acceptable if they include reconciliation to GAAP metrics, are not given greater prominence, and are not misleading.
Step-by-step explanation:
The question is options B, C, and D - any non-GAAP metric must be accompanied by a reconciliation to the closest comparable GAAP metric, they should not be given greater prominence than GAAP disclosures, and they must not be misleading.
GAAP, which stands for Generally Accepted Accounting Principles, is a set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. Non-GAAP metrics, on the other hand, are supplemental measures of a company's financial performance that are not defined or required by GAAP. These non-standard metrics can provide additional insight into a company's operations, but to avoid misleading investors, U.S. regulators, such as the Securities and Exchange Commission (SEC), have set guidelines for their use.
Accordingly, non-GAAP metrics must come with a detailed and understandable reconciliation to the closest GAAP metric, allowing stakeholders to see how the non-GAAP measure compares to the standard accounting figures. Additionally, they cannot overshadow the official GAAP figures in a company's financial reports, ensuring that the standard accounting measures remain at the forefront for clarity and comparability. Furthermore, it is critical that non-GAAP metrics are not used in a misleading manner; they should be representative of the company's actual financial status and should not be utilized to obscure or embellish financial results.