Using Performance Measures in Corporate Reporting | Chartered Accountants of Canada

In 1993, the CICA published a research report called Using Ratios and Graphics in Financial Reporting. Since then, the practice of disclosing performance measures in corporate reporting has changed considerably. Now, performance measures may address matters that are financial or non-financial, GAAP or non-GAAP, operating or non-operating, and relate to areas such as sustainability and governance. The overwhelming amount of information combined with the general lack of definitions and/or calculations of the performance measures continue to be a source of confusion for investors and other stakeholders. The objective of this study is to provide practical guidance on using performance measures in corporate reporting.

To identify the objectives of using performance measures in corporate reporting and the perceived information needs of stakeholders with regard to the past, present and future activities of a company.
To discuss the merits and drawbacks of using performance measures to communicate with investors and other stakeholders.
To survey and summarize relevant pronouncements, regulatory requirements, current literature and current reporting practices of Canadian public companies in annual reports to shareholders.
To analyze the variations in definitions, calculations and disclosure of performance measures (for example, in numerical, graphical and/or narrative form).
To assess what (if any) performance measures might be meaningful and useful in communicating information on company strategies, objectives and performance against objectives.
To assess the need for standards covering the definition, calculation and disclosure of performance measures.
To propose standard definitions and formulae for key performance measures and to establish a framework for providing guidance on using performance measures in corporate reporting.