Non-cash charges commonly excluded in non-GAAP earnings include which of the following?

• A. Amortization of intangibles
• B. Cash dividends
• C. Interest expense
• D. Cost of goods sold

Answer: (A)

Non-GAAP earnings are adjusted to remove items that don’t involve an actual cash outlay in the period, to show ongoing operating performance. Amortization of intangible assets is a non-cash accounting expense; it reduces GAAP net income but doesn’t require current cash, so companies commonly add it back when reporting non-GAAP earnings. The other items are cash-related or not expenses, so they aren’t typically treated as non-cash charges to be excluded.