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FMA consultation on disclosure of non-GAAP financial information

Page last updated: 22 May 2012

Media Release
22 May 2012

The Financial Markets Authority has today published draft guidance for public consultation on the disclosure of non-GAAP financial information.

One of the most common forms of non-GAAP financial information is profit information often referred to as 'alternative performance measures' (APMs).

"The use of APMs such as 'underlying profit' and 'normalised profit' in public documents including annual reports, market announcements and transaction documents is becoming increasingly common in New Zealand. These measures can provide useful information to investors, but they also have the potential to be misleading if used to mask bad news," said Elaine Campbell, FMA Head of Compliance Monitoring.

FMA's guidance is designed to assist issuers in their communication of financial information to investors and other stakeholders to minimise the potential for it to be misleading.

FMA commenced initial consultation with market participants in November last year. In developing this draft guidance FMA held targeted discussions with small groups of NZX listed company chief financial officers, independent directors and audit firms.

"The candid feedback we received during our preliminary consultation has been valuable in shaping the draft guidance within this consultation paper. It is important for both issuers and investors to have greater clarity on the use of non-GAAP financial information which will contribute to increasing confidence in our markets," said Elaine Campbell.

FMA welcome comments and suggestions from interested parties before the guidance is finalised.

Interested parties are invited to provide feedback on the revised draft guidance to consultation@fma.govt.nz by 5pm on Friday 29 June 2012.

FMA aims to publish final guidance by 31 August 2012 to apply to documents published from 1 January 2013.

The consultation paper can be found here.


Scott McMurray Tel. 029 222 0776 or scott.mcmurray@fma.govt.nz