No accounting for Jack Daniels spirit

That popular folksy TV advertising image of Lynchburg, Tenn., townspeople in a field suddenly seems a bit on the blurry side.

An examination of parent BrownForman’s financial results reveals the Jack Daniel’s whiskey maker based in Lynchburg is using accounting practices that have drawn regulatory scrutiny at other companies, according to a MarketWatch report.

Accounting experts criticized Brown-Forman for using adjusted, nonstandard numbers; for failing to reconcile them with its standard numbers; for making an adjustment for inventory that is not allowed under SEC rules; and for being inconsistent in its reporting for acquisitions and divestitures.

Brown-Forman, which reported better-than-expected earnings last week, said its nonstandard metrics “assist in understanding both our performance from period to period on a consistent basis, and the trends of our business.” It added that it fully complies with Securities and Exchange Commission rules.

What grates experts is that a close examination of the results suggests the Jack Daniels owner isn’t following guidelines, set last May by the SEC, that remind companies that numbers prepared according to Generally Accepted Accounting Principles (GAAP), must be shown first and emphasized equally alongside adjusted, or non-GAAP, figures, which often make results look better.

The guidelines are part of an SEC crackdown on the use of non-GAAP earnings numbers that has led to comment letters to dozens of companies, many which have had to change their reporting practices.