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Non-GAAP financial measures can be useful to issuers and investors because they can provide additional insight into an issuer’s financial performance, financial condition and/or cash flow. The use of non-GAAP financial measures also can provide issuers with flexibility in communicating useful, entity-specific information. Problems can arise, however, when non-GAAP financial measures are presented inconsistently, defined inadequately, or obscure financial results determined in accordance with GAAP.
Non-GAAP financial measures typically lack a standardized meaning and thus are generally not comparable from one issuer to the next.
This Statement is intended to assist issuers in providing clear and useful disclosure for investors and other users of non-GAAP financial measures, and to help reduce the risk that such measures are presented in a way that could be misleading. Nonetheless, IOSCO reminds issuers that while this Statement is intended to assist them in providing clear disclosure of non-GAAP financial measures, their presentation in accordance with the proposed Statement is not a substitute for compliance with national regulatory requirements.
The IOSCO Board seeks public comment on the proposed Statement on or before 5 December 2014.