Underlying Profits: Principles for Reporting Non-Statutory Information

  • Date:27 Feb 2015
  • Type:Policy Paper

In 2009 the AICD and Finsia released their joint publication, Underlying Profits: Principles for Reporting of Non-Statutory Information. These principles were designed to encourage greater consistency and transparency in non-statutory profit reporting. 

The seven AICD/Finsia principles for underlying profit include:

1. Report underlying profit, where relevant, in addition to statutory profit
2. Use the term ‘underlying profit’ when describing an adjusted profit figure
3. Reconcile the underlying profit figure to the statutory profit figure and present the adjustments in tabular form, with any necessary accompanying explanation
4. Present the underlying profit and accompanying explanation in the directors’ report or other management discussion and analysis of the profit result
5. Include both positive and negative adjustments to the statutory profit figure – the disclosure of underlying profit should not be seen as an opportunity to “window dress” results
6. Maintain consistent adjustments to the statutory profit figure between reporting periods
7. Disclose whether these principles have been relied on in reporting an underlying profit figure

Following the release of this publication, ASIC commenced its consultation in the development of its regulatory guide on non-ifrs financial information.  In 2011 ASIC released its guide, RG 230, Disclosing Non-IFRS Financial Information, which incorporated some of the principles highlighted in the publication, Underlying Profits.

Click here to view the publication. (876KB)