The FRC’s review found that, while companies generally provided good quality APM disclosures, their context needs to be better explained, particularly as profit-based APMs tended to be more favourable than their GAAP results.

The provision of comprehensive and informative APM explanations continues to be an area that requires improvement. Most explanations were high-level and lacked sufficient granularity to enable readers to understand individual APMs, specific adjustments made and any significant judgments, the FRC said.