Developing and Reporting Supplementary Financial Measures—Definition, Principles, and Disclosure

The IFAC Professional Accountants in Business (PAIB) Committee has released International Good Practice Guidance, Developing and Reporting Supplementary Financial Measures, to provide recommendations for the use of supplementary financial measures as part of high-quality financial reporting in organizations. Since supplementary financial measures fall outside the remit of GAAP, they may lack transparency, comparability, and consistency—essential qualities for investors and other stakeholders wanting to assess financial performance. To address this challenge, the guidance establishes a set of principles that allows professional accountants to develop and report useful measures in accordance with the qualitative characteristics of financial information.