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26 March 2009

EFRAG discussion paper on Performance Reporting

The discussion paper explores some key performance reporting issues that are of fundamental importance and are not covered in the IASB/FASB project on Financial Statement Presentation.

EFRAG, together with a group of national standard-setters, issued a discussion paper that explores and encourages debate on some key performance reporting issues.


Although the IASB and FASB have an active project on Financial Statement Presentation and have indeed issued a Discussion Paper on the subject recently, there are a number of fundamental issues about the presentation of financial performance information that that discussion paper does not address.


Those issues include:

Ø       should the net income line be retained?

Ø       (if it should be retained), what should the basis be for determining whether something is within net income or outside net income?

Ø       what role should recycling have in performance reporting?


The paper notes that performance is a complex, multi-faceted notion that cannot be encompassed in one or a few numbers. Nevertheless both preparers and users want some key performance reporting lines to convey headline numbers and to provide a starting point for analysis. It is therefore important that items of income, expense, gains and losses are disaggregated, grouped and aggregated in a way that ensures that the most useful key lines are presented. The paper notes that whether recycling is needed also depends on the aggregation/disaggregation model used. The final chapters of the paper discuss various disaggregation models.


Deadline for comments is 30 September 2009.


The paper is attached below.


© EFRAG - European Financial Reporting Advisory Group

Documents associated with this article

EFRAGs draft response to the FCAG request for input.pdf

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