The International Federation of Accountants (IFAC) is consulting on proposed guidance designed to improve the quality of supplementary financial measures used in internal and external reporting, by developing a benchmark for their use.

The guidance recommends professional accountants consider a number of attributes when developing and reporting supplementary financial measures such as earnings before interest, taxes, depreciation, and amortisation (EBITDA); underlying profit; and free cash flow. It outlines principles regarding the qualities such measures should have and the disclosures that should accompany them if reported externally.

Charles Tilley, chair of the Professional Accountants in Business (PAIB) committee, which developed the guidance, said: ‘High-quality information is crucial for well-informed decision making about an organisation, both internally and externally. Well-developed supplementary financial measures increase users’ understanding of an organisation and its performance.’

The closing date for comments on the exposure draft is 26 May 2014. Details are here: https://www.ifac.org/publications-resources/developing-and-reporting-supplementary-financial-measures?utm_source=IFAC+Main+List&utm_campaign=1b57aaa5b2-PAIB_Release_Feb_26_20142_26_2014&utm_medium=email&utm_term=0_cc08d67019-1b57aaa5b2-80289565