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Small cap financial reporting: Determinants of emphasis and placement of non-GAAP disclosures

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  • Campbell, Linda
  • López, Dennis M.

Abstract

This study examines the determinants of emphasis on non-GAAP disclosures in the earnings announcements of small cap companies. Two proxies of non-GAAP information emphasis are investigated—placement of the first non-GAAP disclosure and placement of the non-GAAP to GAAP reconciliation required by Regulation G. Using hand-collected data from fourth quarter press releases, we find evidence indicating that small cap firms place a higher level of emphasis on non-GAAP financial measures when GAAP earnings suggest lower value-relevance and when their shares are owned by a higher proportion of institutional investors. We also find that small cap companies decrease the level of emphasis placed on non-GAAP information as their listing tenure increases.

Suggested Citation

  • Campbell, Linda & López, Dennis M., 2010. "Small cap financial reporting: Determinants of emphasis and placement of non-GAAP disclosures," Research in Accounting Regulation, Elsevier, vol. 22(2), pages 114-120.
    • Handle: RePEc:eee:reacre:v:22:y:2010:i:2:p:114-120
    DOI: 10.1016/j.racreg.2010.07.006
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    References listed on IDEAS

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    Cited by:

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    2. Silvia Gardini & F. Marta L. Di Lascio & Franco Visani, 2017. "Opportunism in disclosing pro-forma indicators: rationale and contextual drivers," BEMPS - Bozen Economics & Management Paper Series BEMPS42, Faculty of Economics and Management at the Free University of Bozen.

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