Financial reporting from games-publishers often makes for interesting reading. Almost always, you’ll see things quoted like “non-GAAP earnings”, and “non-GAAP net sales” and so on, accompanied by some substantially large dollar figures.
So, what actually is GAAP reporting? Well, there are two major systems of financial reporting. One is the International Financial Reporting Standards (IFRS), and the other is Generally Accepted Accounting Principles (GAAP) which is used in the USA. GAAP is a collection of rules and principles about how a company reports its income, sales, losses, assets and overall financial operations.
The principles of GAAP are: regularity, consistency, sincerity, permanence of methods, non-compensation, prudence, continuity, periodicity, Full Disclosure/Materiality, and Utmost Good Faith.
So, what’s non-GAAP reporting? Well, non-GAAP reporting pretty much means that one or more of those principles isn’t being observed.