What are Pro Forma Financial Statements? Pro forma financial statements are financial reports issued by an entity, using assumptions or hypothetical conditions about events that may have occurred in the past or which may occur in the future.

What is included in pro forma financial statements?

In financial accounting, pro forma refers to a report of the company's earnings that excludes unusual or nonrecurring transactions. ... These models forecast the expected result of the proposed transaction, with emphasis placed on estimated net revenues, cash flows, and taxes.

Are pro forma financial statements GAAP?

Are Pro Forma Financial Statements GAAP? No, they're the opposite. Pro forma financial statements are defined as those that do not follow generally accepted accounting principles—and that's the point of them: to include or exclude items that GAAP wouldn't allow.