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APM grow in popularity but still lack comparability, Mazars’s study finds

Following the entry into force of the ESMA Guidelines for presenting Alternative Performance Measures (APM) last July, Mazars has conducted a study of their use in the financial information of European listed entities, highlighting a growing popularity in APM but some disparity in the reporting.

Mazars analysed the financial information for the first half of 2016 and the year-end 2015 issued by all entities belonging to the Euro Stoxx 50 index. The study confirmed that APM play a key role in financial communication and that there is a consistency per segment in the indicators used, but the study showed that there are still significant differences in the content of the indicators used despite them using the same label.

“Although APM definitions are generally provided and worded clearly, APMs are often presented with more prominence than their IFRS most reconcilable indicator, especially in the press releases and in the presentations to analysts,” Mazars said in a statement.

The results of the study were presented at an event held in Milan on 29 November and the presentation was followed by a round table discussion.

Alternative Performance Measures (APM) base of international study is in the financial information of European listed firms after the entry into force of the ESMA Guidelines. “The discussion confirmed that, considering their relevance and widespread use in financial communication, APMs will continue to play a role and, accordingly, standard-setters and supervisory authorities have in front of them a journey to undertake,” Mazars said in a statement.

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