On 8 September 2014, the International Organisation of Securities Commissions (IOSCO) published its proposed Statement on Non-GAAP Financial Measures (the 'proposed Statement') . This proposed Statement sets out IOSCO's expectations for issuers with respect to their presentation of financial measures other than those prescribed by Generally Accepted Accounting Principles (GAAP) and referred to as 'non-GAAP' financial measures. It is intended to assist issuers in providing clear and useful disclosure for investors and other users of non-GAAP financial measures, help reduce the risk that such measures are presented in a way that could be misleading.
On 13 October 2014, EFRAG issued its final comment letter. EFRAG reiterated the view that non-GAAP financial measures can provide useful information when properly used and presented, and therefore, supported the idea that they should be clearly defined and explained by preparers, and presented consistently over time to improve the understanding of the performance by users of financial information.
However, EFRAG recommended that the scope of the requirements be supported by an underlying principle so as to target the requirements more narrowly and hence, contribute to effective disclosures.