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In this whitepaper, the Manufacturing Technical Committee of the Product Quality Research Institute provides information on the common, best practices in use today in the development of high-quality chemistry, manufacturing and controls documentation. Important topics reviewed include International Conference on Harmonization, in vitro–in vivo correlation considerations, quality-by-design approaches, process analytical technologies and current scale-up, and process control and validation practices. It is the hope and intent that this whitepaper will engender expanded dialog on this important subject by the pharmaceutical industry and its regulatory bodies.

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In this article, we explore the disclosure of non‐GAAP earnings by large, publicly traded companies, and the possible impact of the 2010 change in Regulation G and S‐K on corporate reporting behavior. The reporting of non‐GAAP earnings measures is not required for public companies, nor are these measures audited. There exists considerable leeway in the manner and extent to which companies can report and calculate non‐Generally Accepted Accounting Principles (GAAP) earnings. Not surprisingly, non‐GAAP reporting standards are a concern for regulators trying to uphold the consistency and comparability of financial reporting. We collected the fourth quarter earnings releases of Standard and Poor's (S&P) 100 companies for the years 2010 through 2016 to study their reported annual non‐GAAP earnings disclosures, if any. Adjustments made to GAAP earnings were classified into eight common categories (e.g., Restructuring Charges, Tax Related Benefits/Charges) in order to calculate the magnitude, materiality, and nature of the adjustments reported. Our analysis shows that the number of companies reporting non‐GAAP earnings increased over our period of study, with a significant increase occurring after the 2010 liberalization of the Regulation G rules. We found an increase in all categories of adjustments and that most were −10% to +10% of net income. The median values of adjustments were positive in almost all the categories indicating non‐GAAP adjustments generally increase non‐GAAP net earnings. We observed many instances of companies reporting the same category of non‐GAAP earnings over multiple years. Further, we find that companies that do not report non‐GAAP earnings have higher market capitalizations than non‐GAAP earnings reporters. This study contributes to the research of non‐GAAP earnings reporting with an extensive analysis of the disclosure, the nature and magnitude of adjustments companies report, and the characteristics of those companies that choose to disclose.

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