SEC Weighs in on Tariff Accounting, Just in Time

Public companies have been asking a critical question since tariffs started reshaping their cost structures, which has largely gone unanswered: how are we supposed to account for all of this? Fortunately, they just received the closest thing yet to an official answer.

At PLI’s SEC Speaks conference, the agency’s bean counters took up the subject right as first-quarter 10-Qs are coming due. According to a Perkins Coie summary, the chief accountant for the Division of Corporate Finance, Heather Rosenberger, noted that while the specificity of tariff disclosures has improved meaningfully over the past year, companies shouldn’t get too creative or take overly aggressive approaches to how they present their tariff costs. Non-GAAP adjustments designed to strip out the impact of tariffs are, in her words, “likely not appropriate.”

The instinct to exclude tariff costs is understandable. Executives would naturally prefer that investors focus on business performance without the impact of what companies may view as a temporary external factor. That’s perhaps why there are isolated instances of companies excluding tariffs from non-GAAP numbers, like Harley-Davidson did for 2019. But tariffs are unavoidable costs of doing business. They’re recurring. They’re settled in cash. Stripping them out of non-GAAP measures, as the CFA Institute argued back in 2025, is not unlike adjusting out rising commodity prices, which have the same characteristics. If investors want to mentally discount tariffs, that’s their prerogative. Management can and should measure the impact of tariffs, even if only an estimate, so investors can do that if they wish. But presenting such non-GAAP adjustments would be frowned on, the CFA predicted. One year later, it seems to have been proven right.

The guidance from SEC Speaks may be the clearest indicator on tariff accounting that public companies get for a while. The Corp Fin staff also shared a status update on its disclosure review program, noting that comment letter dissemination is running approximately five months behind schedule. That backlog is a legacy of last fall’s government shutdown, which created a temporary halt in review activity described by staff as a “pens down” situation, that eventually left more than 1,000 registration statements piled up. The good news is that the time-to-first-comment on new filings, which reached 70 days at one point, has come back down to around 30 days. The bad news is that companies looking to comment letters as a signal of staff priorities are going to be reading yesterday’s news.

This lack of real-time guidance only adds to this moment’s general “DIY” vibe in securities regulation. The retreat from comment letters as a guidance mechanism has a parallel in the SEC’s scaled-back approach to no-action letters on shareholder proposals—another area in which companies must increasingly reason through the rules without the staff’s input.

All of this is happening as the SEC actively works to grow the number of public companies. Whether the loss of comment letters as a source of up-to-date guidance on issues like tariff accounting makes that goal harder to achieve remains to be seen.

For issuers, the practical takeaway is that tariff-related disclosures will continue to receive scrutiny, even in the absence of detailed, real-time guidance. For now, what little the SEC has said about tariffs is at least unambiguous: disclose them, estimate them, and don’t adjust them away.

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