IASB member discusses non-GAAP measures

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Mar 02, 2017

On March 2, 2017, the International Accounting Standards Board (IASB) posted an article from Compliance Week, where IASB member Gary Kabureck discussed non-GAAP measures and plans the IASB has to address some of its challenges.

Mr. Kabureck noted that the IASB would begin addressing non-GAAP earnings measures in its research project on primary financial statements. However, he stated that “[t]he challenge for us is to put some order and structure into the reporting of financial performance while simultaneously providing relevant information that faithfully represents the performance of the company.” Some of the challenges include EBIT, income before non-recurring items, income from core operations, and operating profit. Next, he provided three possible philosophical approaches when determining the composition of an alternative performance measure. These approaches included:

  • Explicit requirements for composition.
  • Managerial approach similar to segment reporting.
  • Principles-based approach.

Finally, he discussed accounting policy disclosures that are being considered by the IASB.

Review the article on the IASB’s website.

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