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EFRAG, together with a group of national standard-setters, issued a discussion paper that explores and encourages debate on some key performance reporting issues.
Although the IASB and FASB have an active project on Financial Statement Presentation and have indeed issued a Discussion Paper on the subject recently, there are a number of fundamental issues about the presentation of financial performance information that that discussion paper does not address.
Those issues include:
Ø should the net income line be retained?
Ø (if it should be retained), what should the basis be for determining whether something is within net income or outside net income?
Ø what role should recycling have in performance reporting?
The paper notes that performance is a complex, multi-faceted notion that cannot be encompassed in one or a few numbers. Nevertheless both preparers and users want some key performance reporting lines to convey headline numbers and to provide a starting point for analysis. It is therefore important that items of income, expense, gains and losses are disaggregated, grouped and aggregated in a way that ensures that the most useful key lines are presented. The paper notes that whether recycling is needed also depends on the aggregation/disaggregation model used. The final chapters of the paper discuss various disaggregation models.
Deadline for comments is 30 September 2009.
The paper is attached below.