The use of alternative performance measures and the application of ESMA guidelines in the PSI 20 INDEX

• Autor(a) principal: Damásio, Eduardo Manuel Novo
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/18442
• topic: Alternative performance measures; ESMA guidelines; PSI 20 index; APMs; Non-GAAP; Finanças; Indicadores de desempenho; Índice PSI20; CMVM Comissão do Mercado de Valores Mobiliários; Portugal

In 2015, the European Securities Markets Authority published its Guidelines on Alternative Performance Measures (APMs). These Guidelines aim to improve the transparency, comparability, reliability and comprehensibility of financial measures not defined by the applicable financial framework. The Guidelines became effective in Portugal in July 2016. The National Competent Authority responsible for the supervision of securities markets in Portugal, Comissão do Mercado de Valores Mobiliários, has incorporated the Guidelines on APMs into its supervisory practices. Therefore, issuers with securities admitted to trading on the Portuguese regulated market must make every effort to comply with the Guidelines when disclosing APMs in management reports, prospectuses and/or press releases. The Guidelines set out principles regarding the presentation (such as labels, prominence, neutrality, comparatives and consistency) and the disclosure (definitions, reconciliations and explanations) of APMs. This study aims to provide an illustration regarding the use of APMs by issuers in the PSI 20 Index and to assess their level of compliance with the Guidelines in press releases and management reports. This study reveals widespread use of APMs by all issuers in the PSI 20 Index when communicating their performance, in management reports, financial statements as well as in press releases. When analysing the use of APMs by sector, it was observed that issuers in the financial sector use more APMs, on average, than issuers in other sectors and Communications and Materials Sectors use fewer APMs. Findings of this study demonstrate that there is still room for improvement in the level of compliance by issuers in the PSI 20 Index with the APMs Guidelines, in particular in the context of press releases. Principles regarding the explanations, prominence and reconciliations were the least complied with while comparatives, consistency and neutrality the most complied with. The study also provides examples of incorrect application of the principles of the Guidelines enabling issuers to improve the quality of their reporting and the NCA with detailed analysis by issuer which may prompt enforcement.