Accountants/Directors welcome alternative measures guidance

11 November 2011

Accountants and Directors welcome alternative measures guidance

The New Zealand Institute of Chartered Accountants (NZICA) and the Institute of Directors in New Zealand (IOD) are supportive of announcements made today that the Financial Markets Authority (FMA) is to provide guidance to the business reporting community on alternative performance measures.

Following the global trend, the FMA has confirmed that it plans to consult the industry on a set of guidelines that will articulate clearly expectations for alternative performance measures. NZICA and IOD look forward to actively engaging in the process and submitting on proposals together say the two Chief Executives.

“Whatever you like to call it – normalised, pro-forma or alternate - NZICA is a strong advocate for clarity in this area and would like to see any guidance issued focused on a couple of key principals. Alternative measures must not mislead readers, but any guidance shouldn’t inhibit useful communication from the business,” says NZICA Chief Executive Terry McLaughlin.

IOD Chief Executive, Ralph Chivers agrees, and believes consistency of approach across organisations and between reporting periods will be a welcome flow-on impact of guidance.

“We are happy for there to be clarity but don’t want companies to be discouraged from providing additional information that is useful to investors, particularly when it relates to the underlying performance of their business,” says Mr Chivers.

NZICA and the IOD represent 33,000 and 5,250 business professionals’ respectively in New Zealand and overseas – this issue represents a natural area for collaboration as members of both Institutes are involved in the development of annual statements.

ENDS

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