Badenhorst, Wessel M.Von Well, Rieka2024-09-052024-09-052023-07Badenhorst, W.M. & Von Well, R. 2023, 'The information content of mandatory and discretionary non-GAAP earnings', Pacific Accounting Review, vol. 35, no. 3, pp. 451-476. DOI: 10.1108/PAR-07-2022-0102.0114-058210.1108/PAR-07-2022-0102http://hdl.handle.net/2263/98048PURPOSE – This paper aims to investigate the pricing of discretionary earnings in South Africa. This is a unique setting, as South African listed firms also reportmandatory non-GAAP earnings (“headline earnings”). DESIGN/METHODOLOGY/APPROACH – Results are based on multivariate regression analyses for South African firms that report from 2010 to 2019. FINDINGS – Findings show that the value-relevance of discretionary earnings exceeds that of both GAAP earnings and headline earnings. In addition, placement of discretionary earnings reconciliations communicates information about the decision-usefulness of earnings. ORIGINALITY/VALUE – Discretionary earnings remain the most value-relevant earnings measure, despite the divergent decision-useful characteristics offered by headline earnings and GAAP earnings. Therefore, the most decision-useful earnings reflect unique industry or firm characteristics rather than the assurance arising from regulation.en© Wessel M. Badenhorst and Rieka von Well. This article is published under the Creative Commons Attribution (CC BY 4.0) licence.EarningsNon-GAAPValue-relevanceDiscretionaryHeadlineArticle