Skip to content

IAASA publishes an updated Commentary and Key Recommendations on the use of Alternative Performance Measures by selected Irish equity issuers

IAASA has today published the results of a thematic examination of selected Irish equity issuers’ use of Alternative Performance Measures (APMs) – also known as Key Performance Indicators (KPIs). APMs, which are not governed by accounting standards, are used to analyse the performance, financial position and cash flows of a business and to highlight the key components of an entity’s results for users of financial statements.



The findings are published in Alternative Performance Measures – A Survey of their Use together with Key Recommendations: An Update.  The Paper is primarily directed at listed entities currently preparing their annual financial statements for 2014 year ends falling within IAASA’s financial statement review remit. However, as the Paper outlines best practice with regard to the presentation of APMs, it should be of interest to a wider range of companies when preparing their 2014 year end financial statements.


In its November 2012 publication Alternative Performance Measures – A survey of their use together with key recommendations, IAASA encouraged issuers, in their selection preparation and presentation of APMs to:


  1. explain the reason for each APM;


  1. clearly define each APM;


  1. explain the calculation of each APM;


  1. reconcile each APM to the relevant IFRS-based measure;


  1. include comparative amounts for each APM;


  1. disclose all APMs in a single location;


  1. avoid presenting APMs that detract from or conflict with IFRS-based financial statement measures; and


  1. avoid giving undue prominence to non-IFRS-based APMs.


IAASA has now undertaken an updated review of selected equity issuers use of APMs in their 2013 annual financial statements


This updated review found that:


  1. the use of APMs amongst the selected equity issuers is universal;


  1. certain issuers distinguish between “key” APMs and other APMs;


  1. improvements are evident in a number of cases compared to the results of the 2012 study but there is still scope for further improvements in order to aid users’ understanding of the financial results;


  1. differing definitions of apparently similar APMs are used by different issuers; and


  1. there is a tendency for issuers to “flatter” their results by the exclusion of certain items from performance measures.


IAASA reiterates its 2012 recommendations and encourages  issuers to redouble their efforts to  meet users’ needs and comply with IAASA’s recommendations.