Disclosure of APMs often lacks necessary level of transparency
The disclosure of Alternative Performance Measures (APMs) is often not up to the standards of transparency required by the ESMA Guidelines. This finding is set out in the 11th edition of the AFM Market Watch, which included a thematic review of 32 semi-annual reports.
It is crucial that these APMs are reported in a way that is reliable and transparent. Not only in annual and semi-annual reports, but also in other publications such as press releases and prospectuses. The thematic review by the AFM reveals that the necessary level of transparency is often lacking. Improper disclosure can cause difficulties for the users of financial reporting.
For example, it can be unclear how an APM is calculated or whether the same adjustments are made consistently each year. In some cases, it might be unclear that a displayed measure is in fact an APM, or APMs might even contradict and distract from the IFRS figures.
The AFM urges issuers to evaluate the compliance of their Alternative Performance Measures with the ESMA Guidelines for APMs in their publications. We also urge auditors and advisers to play a strong role in this process and support their clients in this matter.
AFM Market Watch
The AFM Market Watch is a newsletter published on a regular basis that covers current capital market developments and topics in an in-depth way. The AFM Market Watch newsletter covers capital market-related topics such as MAR, MiFID II and transaction reporting. With the AFM Market Watch we will express observations and findings on current, capital market-related developments by using data analyses.
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