Are Your KPIs Ready for FASB Scrutiny in Q3 2025?

Is Your Q3 2025 Filing Ready for a KPI Scrutiny Wave? As we get through Q3 2025, CFOs and reporting leaders should turn the spotlight on one critical area often overlooked amidst the rush to balance the books—KPI transparency. Why it matters now: In 2025, the FASB signaled a strategic shift—actively evaluating whether to bring commonly used non‑GAAP metrics like EBITDA and free cash flow into the formal reporting framework, potentially with standardized definitions and mandated disclosures. Quick‑win, step‑by‑step checklist for your Q3 10‑Q / MD&A: 1. List all non‑GAAP KPIs in your MD&A and risk discussions—especially EBITDA, adjusted earnings, free cash flow. 2. For each KPI, break down and disclose your exact calculation inputs (e.g., add‑backs, amortization, one‑time items). Transparency now can prevent future audit fatigue. 3. Link each KPI to strategic drivers or risks—investors and regulators increasingly expect clear rationale, not just numbers. 4. Tag variants of each KPI—e.g., “EBITDA (adjusted for X)”, and ensure consistency across filings. 5. Run a pre‑audit spotlight: flag where KPI formulas differ from peers—or even between your 10‑Q and an earnings press release. Consistency is your ally. Lead with confidence: Elevate your MD&A by going beyond performance reporting. This is not just about compliance—it’s about building credibility before FASB potentially tightens the rules. Visit us at https://lnkd.in/gP3tiQgs