The good times are coming back, sort of. Although employment remains far below its late 90s peak in Silicon Valley, and through the miracle of modern-day offshore outsourcing appears not to be fully recovering soon, the technology industry as a whole is doing much better than it did during the catastrophic first years of the new millenium. Interest rates remain low, providing relatively easy cash for those brave enough to borrow it.

The vast amounts of technology developed adn deployed in the late 90s, in preperation for a Y2K crisis that didn't come (either because it was never a threat or because everyone prepared for it very well), is now at or past the end of its normal replacement/update cycle. And innovation marches on, with things such as web services, wireless techniques, open-source development, and the dawn of the age of ubiquitous computing continuing to the make the technology industry the most dynamic place to be.

Revenue and profitibility numbers for tech companies reflect the industry's minor renaissance. Heavyweights such as Intel, IBM, Cisco, and even HP have shown strength in recent quarters. Emerging industry heavyweights Google and Yahoo continue to grow rapidly, and in a development reminiscent of the late 90s, get punished if their hypergrowth is simply not hyper enough.

Which leads to the topic of this essay: what is it with all this non-GAAP reporting? GAAP, as all financial people and most technical people know, is the agreed-upon set of principles that public companies must follow in reporting their results. GAAP takes two primary ideas--that revenue and expenses should be recorded when a product is delivered or service is sold and that specific expenses should be matched against specific revenues--and lays down a complex set of rules for how money should be treated.

Many executives don't like GAAP, of course. GAAP gives those damnable beancounters too much power, it doesn't recognize the future value of new contracts, it doesn't recognize the "true" value of many assets, and most important, it often doesn't come near expressing the state of a company's cash position.

So back in the go-go 90s, many companies simply stopped reporting it. Oh, they might have stuck GAAP numbers in a footnote somewhere, but what they really wanted to tell the world as their story about their "pro-forma" results, which often did not include pesky things such as accounting for recent acquisitions (especially if they were proving to be bad acquisitions), the cost of short-term money the company had to borrow, or even an accurate accounting of those recent Super Bowl ads.

Pro-forma reporting was the road to perdition, and it played an important role in the vast over-valuing of dot.com companies and even large technology companies in the late 90s. Pro-forma reporting was whatever the company wanted it to be. Pro-forma reporting ignored the fundamental fact that GAAP reporting has been agreed upon by financial people throughout the U.S. and provides an apples-to-apples method for investors to evaluate companies. Deviating from the principles one notch unlevels the playing field for investors, and it is investors that fund any company's business.

Of course, corporations of any size can monkey around within GAAP; its rules can't stop a company from things such as channel stuffing, shifting operating expenses around, or playing numbers games within various subsidiaries. But it does prevent companies from making its numbers be "whatever they want them to be" (in the old accountant's joke), and GAAP provides at least a measure of protection to investors, be they large mutual funds moving millions of shares or individuals trying to build a modest future.

Yet non-GAAP is coming back. Look at the reporting being done for the most recent quarter. Many companies are reporting "non-GAAP" numbers right alongside GAAP numbers. They're not defining these non-GAAP numbers. Ask them about it, and they provide what sound like credible reasons (mostly having to do with cash flow). No one has yet resorted to "pro-forma" reporting. But the genie is trying to escape from the bottle again.

If you're in business, fulminate against GAAP all you want. Work to get unhelpful rules changed. But although a decidedly unglamorous topic, it was non-GAAP reporting that played one of the major roles in the build-up and then destruction of $7 trillion in NASDAQ company wealth. Let's not be condemned to repeat this lesson of history, OK?