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July 8, 2026Australian Accounting Review

Non‐GAAP Earnings Disclosure and Trade Credit

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Authors

HCHyoung Seok ChooYonsei University

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Implication

Randomized trial examines the impact of non-GAAP earnings disclosures on trade credit use, suggesting enhanced financing benefits.

Key Points

  • This study investigates how non-GAAP earnings disclosures influence buyer reliance on trade credit and traditional financing.
  • Analyzed 42,675 firm-year observations for 5,544 U.S.-listed firms from 2003 to 2020.
  • Utilized Heckman two-stage estimation, propensity score matching, and firm fixed effects to address endogeneity.
  • Examined effects under varying conditions like monetary policy uncertainty and managerial ability.
  • Firms disclosing non-GAAP earnings used approximately 35% less trade credit than the sample mean.
  • Low discretionary accruals and reduced cost of debt were observed in firms with non-GAAP disclosures.
  • The benefits were more pronounced when non-GAAP measures excluded nonrecurring items, indicating the importance of disclosure quality.

Cite This Study

Hyoung Seok Choo (2026) studied this question.

synapsesocial.com/papers/6a4de804d2ea289ef6282f2dhttps://doi.org/10.1111/auar.70027
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