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Deloitte comment letter on IFAC supplementary financial measures proposals calls for global coordination

  • Deloitte Comment Letter Image

25 May 2014

Deloitte Touche Tohmatsu Limited has responded to the Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants (IFAC) on its exposure draft for an International Good Practice Guidance (IGPG) on 'Developing and Reporting Supplementary Financial Measures—Definition, Principles, and Disclosures'. We support the objective of developing guidelines on supplementary financial measures, but call for greater global coordination between the various global and other initiatives in this area.

We support the objective of achieving a set of commonly shared guidelines on the presentation of, and information about, supplementary financial measures (SFMs), whose objective would be ensuring the quality, transparency and usefulness of the financial information provided to users, regardless of whether such supplementary financial measures are included within or outside of financial statements. We believe this objective is important given the widespread use of such measures and existing diversity in presentation and explanation of such measures around the world.

However, we note that there are various initiatives in the area of supplementary financial measures in addition to the IFAC PAIB proposals, including:

  • Existing guidance in some jurisdictions, e.g. Australia, New Zealand and Canada
  • Separate proposals on this topic from the European Securities and Markets Authority (ESMA)
  • Expected guidelines from the International Organization of Securities Commissions (IOSCO)
  • The International Accounting Standards Board's (IASB) indicated intention to research the presentation and disclosure of non-IFRS financial information as part of its disclosure initiative project.

In light of the above, our comment letter makes the following observations:

Therefore, due to the global nature of the subject and the varied placement of SFMs (i.e. inside/outside financial statements), care should be taken that actions or guidance targeted at a global audience do not conflict with global initiatives undertaken by global accounting standard-setters and regulators. We therefore strongly suggest that the IFAC PAIB liaises in particular with the IASB and IOSCO so as to coordinate its actions, as well as obtain input from them on any proposed IGPG on SFMs. In this way, we believe that the IFAC PAIB can most effectively contribute to the aim of high quality financial reporting applied without regional variation.

The full comment letter can be downloaded here.

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