APMs: reflection on management
Alison Thomas considers how companies can ensure their alternative performance measures reflect their culture in a positive light.
In 2015, ESMA introduced guidelines for the reporting of alternative performance measures (APMs) – or more specifically, adjusted financial metrics. These guidelines include a requirement to define the metrics and to provide their basis of calculation. They need to be reconciled back to GAAP and be consistent over time.But what do investors think? Are the guidelines sufficient for user needs?