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EFRAG believes that Alternative Performance Measurement (‘APMs’) can provide useful information when properly used and presented, and therefore, EFRAG supports the idea that APMs should be clearly defined and explained by preparers, and presented consistently over time to improve the understanding of the performance by users of financial information.
However, EFRAG believes that the proposed Guidelines do not articulate clearly enough what the underlying principle is that determines the scope of the requirements and the types of disclosures that are asked for. EFRAG believes that the requirements should be targeted more narrowly so as to avoid clutter and boilerplate language in financial reporting.
EFRAG further observes that ESMA has not provided clear evidence on why the existing CESR Recommendation is no longer considered to provide adequate guidance and is in need of replacement. An evidence-based approach would allow ESMA to identify deficiencies in the existing guidance, and set clearer objectives for the guidelines.