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Final guide on supplementary financial measures

  • IFAC (International Federation of Accountants) (lt gray) Image

23 Sep 2014

The Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants (IFAC) has released the final version of its 'International Good Practice Guidance, Developing and Reporting Supplementary Financial Measures'. The guide provides recommendations for the use of supplementary financial measures as part of high-quality financial reporting in organisations.

The guide that was published in a draft version in February 2014 builds on the qualitative characteristics of useful financial reporting and recommends that supplementary financial measures should be relevant, complete, neutral, transparent, understandable and verifiable, comparable, and timely. The guide also offers recommendations on the disclosure of such measures:

  • The definition and purpose of the measure should be explained.
  • Changes in composition of a supplementary financial measure should be disclosed including the reasons for the changes.
  • A quantitative reconciliation to the most directly comparable GAAP measure should be provided.
  • The measure should be given context.
  • Supplementary financial information should complement but not overshadow GAAP measures.

Additionally, the guide recommends that companies should consider obtaining internal or external assurance on their supplementary financial information voluntarily where obtaining assurance on these is not mandated.

The disclosure of non-GAAP information is currently widely discussed and there are several initiatives under way. In December 2013, the Financial Reporting Council (FRC) issued a press release calling for consistency in the reporting of exceptional items.  Following this, in February 2014 the European Securities and Markets Authority (ESMA) launched a consultation on Guidelines on Alternative Performance Measures and earlier this month the International Organization of Securities Commissions (IOSCO) issued a proposed Statement on Non-GAAP Financial Measures.

Please click for more information on the finalised International Good Practice Guidance, Developing and Reporting Supplementary Financial Measures on the IFAC website:

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