WSJ: Tesla’s ‘tailored’ accounting flagged by SEC
Tesla Motors Inc. was criticized by the Securities and Exchange Commission (SEC) for using prohibited accounting practices and sharing the information with investors, The Wall Street Journal reported on Tuesday.
In a regulatory correspondence containing four letters between the SEC and Tesla, dated from mid-September to mid-October, the regulatory body said that the electric car maker used “individually tailored” measurements when calculating revenue under the generally accepted accounting principles (GAAP). It had judged the matter resolved without further action in an October 12 letter sent to the company.
The regulator also concluded that Tesla failed to make a “substantive” case for including non-GAAP figures in its reports.
Tesla said it would drop non-GAAP revenue and other custom metrics mentioned by the SEC from future earnings releases. It also included new language in its third-quarter earnings release which explains that non-GAAP information increases “transparency” for its investors.