The use of non-GAAP financial measures is nearly ubiquitous for U.S. public companies. According to Audit Analytics, 97% of S&P 500 companies used non-GAAP financial measures in earnings releases during 2017.
Many companies believe that non-GAAP financial measures provide meaningful supplemental information to their financial statements that are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For real estate investment trusts (“REITs”), non-GAAP financial measures have always been important due, in large part, to the impact of GAAP on accounting for real estate, such as the impact of depreciation and amortization on the income statement.
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