Beyond the GAAP no.104 - October 2016

ESMA’s recommendations for 2016 financial statements echo this project, with a strong focus on the need for consistency between the performance measures used in the financial statements and those used in other financial communications. In the wake of ESMA’s Guidelines on Alternative Performance Measures coming into effect, the regulator also encourages issuers to ensure that APMs used are useful and relevant.

The regulator also discusses the issue of sub-totals that are not required under IFRSs. It emphasises that labels must be clear and accurately reflect the items grouped under that sub-total. The underlying data should be consistent with the principles of IFRSs, notably the principle of faithful representation. There are plenty of issues here that could usefully be included in the IASB’s research project on the format of financial statements.