Adjusted earnings versus GAAP and IFRS

Reported earnings are what comes out of applying the accounting standard: US GAAP in the United States, IFRS in Europe. Adjusted earnings are what the company itself publishes after excluding items it considers exceptional: restructuring, impairments, share-based compensation. The gap can be large and is not standardised, so every company adjusts in its own way. Hence the rule most often broken when reading results: if the analyst consensus is on an adjusted basis, comparing reported earnings against it does not measure a surprise, it measures a difference in accounting criteria.

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Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.