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The Impact of the FMA Guidelines on Non†GAAP Earnings Disclosures

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  • Elizabeth A. Rainsbury

Abstract

In 2012 the New Zealand Financial Markets Authority (FMA) introduced guidelines for the disclosure of non†GAAP financial information. This study investigates the effect of those guidelines on New Zealand listed companies. The findings show that, despite not being mandatory, these guidelines are modifying corporate disclosure behaviour. Companies have improved the way in which they disclose non†GAAP earnings information and there has been a reduction in the emphasis given to non†GAAP earnings compared with the emphasis given to audited statutory profit. However, the study also highlights areas for improvement, including the depth of explanation of non†GAAP earnings calculations and adjustments, and concern about multiple adjusted earnings figures to explain performance.

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  • Elizabeth A. Rainsbury, 2017. "The Impact of the FMA Guidelines on Non†GAAP Earnings Disclosures," Australian Accounting Review, CPA Australia, vol. 27(4), pages 480-493, December.
    • Handle: RePEc:bla:ausact:v:27:y:2017:i:4:p:480-493
    DOI: 10.1111/auar.12148
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    Cited by:

    1. Sascha B. Herr & Peter Lorson & Jochen Pilhofer, 2022. "Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals," Schmalenbach Journal of Business Research, Springer, vol. 74(3), pages 389-451, September.
    2. Claudia Arena & Simona Catuogno & Nicola Moscariello, 2021. "The unusual debate on non-GAAP reporting in the current standard practice. The lens of corporate governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 655-684, September.
    3. Felix Thielemann & Tami Dinh & Helen Kang, 2019. "Non-GAAP Reporting and Debt Market Outcomes: Evidence from Regulation G," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 71(2), pages 169-203, May.

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