| Nowadays,GAAP reporting fails to give a clear picture of the prospect,core competence and strategy of a company.Therefore,many listed companies choose to report the Non-GAAP measures which adjust the most directly comparable GAAP measures by excluding nonrecurring,noncash and non-operating items.Besides,IASB has been focused on “Primary Financial Statements” for years.However,the Non-GAAP measures are considered misleading since there is a significant gap between Non-GAAP measures and comparable GAAP measures.Under this background,the study takes the Tencent and the Groupon for the case study and comparative study.It is expected that this thesis can increase the reliability of Non-GAAP measures,reduce the opportunism motivation of the management and strengthen the external influence by supervising.In this study,the rationality of adjusted items excluded from GAAP measures are analyzed first.Secondly,predicted deviations of GAAP measures and Non-GAAP measures are calculated to analyze the predicative value of the Non-GAAP measures.Furthermore,the influence of Non-GAAP performance measures on capital cost and the amount of analysts is analyzed.Lastly,the management’s motive of the disclosure of Non-GAAP measures is speculated.Conclusions are as follows:(1)The main adjusted items consists of non-operating income/expenses,stock-based compensation and depreciation and amortization.(2)Its modification is reasonable,demonstrating as follows: Its Non-GAAP measures have predictive value.At the same time,the Non-GAAP measures disclosed by Tencent is able to reduce capital cost and attract more analysts.It is also speculated that the motive of Tencent’ management is to provide incremental information.(3)the main adjusted items of Groupon includes marketing,stock-based compensation and depreciation and amortization.(4)Its modification exists unreasonable place,demonstrating as follows: Its Non-GAAP measures cannot provide additional information values or produce positive value.Hence,The management is more of opportunism.All in all,there is no doubt that reconciled metrics owe some value,however,there is a meed for improvement of reliability.Suggestions are as follows:(1)Investors are advised to analyse Non-GAAP measures combined with GAAP measures.(2)Companies are expected to increase disclosure from the perspective of availability of information.(3)Regulators is ought to improve the administrative measures for the disclosure of information.The creative point of this study lies in the combining analysis of adjustment process and disclosure effect with the management personnel’s motivation.In addition,most of the previous scholars investigate the disclosure motivation of enterprise management whose NonGAAP measures are higher than GAAP.However,this study analyzes enterprises whose NonGAAP measures are lower than GAAP,which provides different analytical perspectives for investors to understand Non-GAAP measures. |
