Pro forma reports often show a higher profit figure than those prepared in accordance with accounting standards because they may exclude certain items that the company considers non-recurring, non-cash, or not indicative of its ongoing financial performance.

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Pro Forma Reports

Question 19

Multiple Choice

Pro forma reports

A) Are simply IFRS compliant reports
B) Are GAAP compliant reports
C) Usually show a lower profit figure than those prepares in accordance with accounting standards
D) Usually show a higher profit figure than those prepares in accordance with accounting standards

Correct Answer: