European Financial and Accounting Journal 2024, 19(2):21-43 | DOI: 10.18267/j.efaj.287

Non-IFRS Earnings Measures in Annual Reports of European Companies

Tomáš Zahradníček1
1 Prague University of Economics and Business, Faculty of Finance and Accounting, Department of Management Accounting, Winston Churchill Square 1938/4, 130 67 Prague, Czech Republic

The article examines disclosure of non-IFRS earnings measures (also called alternative performance measures). The data sample consists of 600 companies that constitute index EUROSTOXX 600 for the years 2021 and 2022. We prove that non-IFRS earnings measures hold a very prominent role in financial reporting. We provide evidence that the reporting of solely IFRS earnings measures in annual reporting is very rare, with only 3% of companies use only IFRS measures. On the contrary, a substantial number of companies (74%) include adjusted non-IFRS measures into unaudited parts of annual reports. Moreover, 25% of companies put adjusted non-IFRS measures into their audited income statements. Our findings enlighten how widespread non-IFRS measures are among European companies and how the European institutions approach this practice of financial reporting.

Keywords: Alternative Performance Measures; IFRS Regulation; Non-IFRS Earnings; Voluntary Disclosure.
JEL classification: M21, M41, M48

Published: December 30, 2024  Show citation

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Zahradníček, T. (2024). Non-IFRS Earnings Measures in Annual Reports of European Companies. European Financial and Accounting Journal, 19(2), 21-43. doi: 10.18267/j.efaj.287
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