Reporting can be displayed using GAAP rules and non-GAAP in the same application

Description

This feature is crucial for companies to showcase financial performance in a manner that is compliant with standard accounting principles (GAAP), as well as providing a perspective using non-GAAP measures that could provide additional insight into business performance.

Example Use Case

Scenario: A mid-market U.S-based firm uses CPM software to track and report their financial performance. Their stakeholders, who include investors, employees, and regulators, are interested in both GAAP and non-GAAP measures.

Solution: The company selects CPM software that has the capability of displaying financial reports using both GAAP and non-GAAP measures using the same underlying data. For example, Net income (a GAAP measure) might be reported alongside Adjusted net income (a non-GAAP measure that excludes certain one-time or non-operating expenses). This approach offers a more comprehensive view of the company's performance.

Considerations

This requirement mandates that the system offers the ability to produce multiple, alternative views of the core financial statements. Most products offer this, but always check to confirm. Some of the lower cost, templated products on the market will offer financial statements with no option to create new ones with a different look.

Questions to Ask a Vendor

• Compliance Assurance: How does your software ensure compliance with GAAP rules while generating financial reports?
• Non-GAAP Support: What options does your system provide for displaying non-GAAP metrics alongside GAAP metrics?
• Switching Mechanism: How easily can users switch between viewing GAAP and non-GAAP measures within the system?