The New Zealand Financial Markets Authority
(FMA) has proposed guidance on the disclosure of non-GAAP financial
information in corporate documents, such as transaction documents
and market announcements.
In the proposed-guidance the FMA sets forth
when non-GAAP financial information should be used and what
additional disclosure to include helping to avoid misleading
information being included.
The proposal deals with GAAP as defined under
New Zealand law and including country equivalents to IFRSs. The
draft is aimed at information such as the alternative performance
measures of ‘underlying profit’ or ‘normalised profit’.
To ensure non-financial information is not
misleading, FMA considers factors such as disclosure as to why the
non-GAAP financial information is useful, how it is calculated, and
the need for reconciliation to financial information included in
the financial statements.
The FMA also gives guidance on information
included in transaction documents such as prospectuses and says
financial information in these documents is required under New
Zealand law to comply with GAAP in certain respects.
The deadline to comment on the consultation
paper is 29 June.