U.S., Global Rulemakers Differ Over ‘Earnings Before Bad Stuff’

They’re the specially tailored numbers that typically flatter company income and downplay expenses.

Numbers like operating profits and free cash flow. U.S. financial regulators three years ago put these non-standardized measures in their crosshairs, zooming in on some of the most egregious uses of what critics call “earnings before bad stuff.”

Now, measures used to portray a company’s performance—but which don’t conform to generally accepted accounting principles (GAAP)— are getting attention from U.S. and international accounting rulemakers.

But don’t expect the same approach on both sides of the Atlantic.

The U.S. Financial Accounting Standards Board is exploring whether to make ...