Response to the Financial Accounting Standards Board’s Invitation to Comment on Financial Key Performance Indicators for Business Entities

ABSTRACT In April 2025, the Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association submitted a comment letter to the Financial Accounting Standards Board (FASB) addressing the accounting for financial key performance indicators (KPIs) used by business entities. Financial KPIs, as defined by the FASB, are most commonly referred to as non-GAAP metrics in the academic literature. This paper reviews the current regulatory frameworks governing financial KPIs—both in the United States and internationally—and summarizes key insights from our letter alongside relevant academic research. It also highlights opportunities for future research, including important questions related to non-GAAP reporting that can now be explored using new data made available through ASU 2024-03, Disaggregation of Income Statement Expenses (issued November 2024), ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (issued November 2023), and IFRS 18, Presentation and Disclosure in Financial Statements (issued April 2024). JEL Classifications: M40; M41; M48.