IOSCO cautions on non-GAAP earnings measures

  • IOSCO (International Organization of Securities Commissions) (dark gray) Image

05 Jun 2002

The IOSCO Technical Committee has issued a "Cautionary Statement" urging issuers, investors, and other users of financial information to use care when presenting and interpreting non-GAAP measures of results.

These measures are often identified by such terms as operating earnings, cash earnings, earnings before one-time charges, EBITDA (earnings before interest, taxes, depreciation, and amortization), adjusted earnings, and pro forma net income. The IOSCO statement "reminds issuers of the responsibility in all instances to ensure that the information they provide to the public is not misleading. Selective editing of financial information may be misleading if it results in the omission of material information. Issuers are cautioned that regulatory actions may be taken if information is disclosed in a manner considered misleading." Click for Full Text of IOSCO Statement (PDF 44k).

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