Financial reporting survey — Issue 10 — Underlying profit 2012

Published on: 13 Jun 2013


The practice of reporting alternative profit measures such as ‘EBITDA’, ‘EBITDAF’, ‘normalised profit’ or ‘underlying profit’ has received significant scrutiny in New Zealand over the past couple of years culminating in the New Zealand Financial Markets Authority (FMA) issuing guidance in September 2012.

The guidance note became applicable from 1 January 2013 and covers the provision of non-GAAP financial information in investor communications other than financial statements (such as directors’ or management commentary and other documents accompanying financial statements, market announcements, press releases, interviews, presentations to investors and briefings to analysts), and in transaction documents (such as prospectuses, investment statements, advertisements, meeting notices etc.).

The guidance was issued by the FMA to assist issuers in ensuring that their communications with investors and other stakeholders are transparent and not misleading, and to promote more meaningful communication of financial information to investors and other users.

Deloitte (New Zealand) undertakes an annual survey of 'underlying profit' disclosures by New Zealand entities.  As the FMA guidance was not applicable for 2012 annual reports there was little change in the results of the Deloitte (New Zealand) survey compared to prior years. Of the 100 companies surveyed, the survey identified 90 companies providing in total 253 alternative profit measures (2011: 89 companies provided 250 measures).


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