CESR proposals on alternative performance measures

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20 May 2005

The Committee of European Securities Regulators (CESR) has published a consultation paper setting out CESR's draft recommendations on (PDF 101k).

The draft recommendation contains several proposals to encourage European listed companies to provide the financial markets with appropriate and useful performance measures. The recommendations relate primarily to:
  • Clear definitions of alternative performance measures. CESR notes that IFRSs define three basic performance measures – revenue, profit or loss, and earnings per share. Other measures that an entity may choose to report must not be inconsistent with the IFRS measures.
  • The presentation of alternative performance measures – they should be in addition to, not instead of, IFRS performance measures and should be presented with less prominence than the IFRS measures.
  • Auditor's involvement should be considered.

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