Users of financial statements in New Zealand overwhelmingly find alternative performance measures (APMs) useful or sometimes useful and believe that a company’s performance shouldn’t be limited to GAAP measures, according to a survey by the External Reporting Board (XRB), New Zealand’s financial reporting standard setting group.
The survey of 87 external users of financial statements found that 88% of respondents described APMs as useful or sometimes useful and 69% of respondents said that a company’s performance measures should not be limited to GAAP measures.
Also, 21% use GAAP as the primary measures of performance, 18% use APMs, and 56% of respondents confirmed that they use both GAAP measures and APMs together.
The most common APMs cited as useful by respondents were: Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) said 57 respondents, and EBITDA with Foreign (EBITDAF) said 45 respondents, or underlying/normalised profit earnings said 59 respondents.
Full survey results can be found here.