Specifically, members of the panel and participants of the outreach event discussed how profit or loss (P&L) could become more useful and what the role of other comprehensive income (OCI) may be. The main observations from the outreach event included:

• The importance of P&L financial information when initiating an analysis. In addition, non-GAAP metrics based on P&L were considered important.
• Investors often view financial reporting to be more relevant than management performance assessments when determining valuation objectives.
• Sell-side analysts focused on short-term, while buy-side analysts considered a longer-term investment decision.
• OCI is an important consideration when determining an accurate company evaluation.
• P&L is often adjusted and the type of adjustments varies on the analysis performed.
• OCI had a “confirmative role for investors” and it is important to evaluate how OCI performed over time.
• Application of the valuation model needs a number reflecting the underlying performance of a business.
• Prudence was considered by some as a conservative bias in accounting and the level of prudence seemed to depend on the type of investor.

The EFRAG will consider the feedback received from the outreach event for its comment letter to the exposure draft.

For more information, see the press release and the report on the EFRAG’s website.