Alternative Performance Measures and ESMA Guidelines: Improving Stakeholders’ Communication

Magli, Francesca; Nobolo, A; Ogliari, M

doi:10.5539/ijbm.v12n12p15

Cited by 3 publications

(8 citation statements)

References 44 publications

(46 reference statements)

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“…In contrast to the results of the survey of Italian companies by Magli et al. ( 2017 ), based on their descriptive evidence, Ruhwedel et al. ( 2017 ) conclude that the ESMA guidelines imply a need for adoption for many DAX and MDAX companies in their annual reports.…”

Section: Results: Insights and Critiquementioning

confidence: 85%

“…More research should be conducted on the impact of the ESMA guidelines on APM reporting by European listed companies (similarly Marques 2017 ; Magli et al. 2017 ). Compared to the empirical evidence on the regulatory activities in the U.S., to date there is scarce empirical evidence on the intended (and the potentially unintended) regulatory consequences of the ESMA guidelines.…”

Section: Discussion Of Future Research Pathsmentioning

confidence: 99%

“…For example, Magli et al. ( 2017 ) use questionnaires sent to the investor relations departments of Italian listed industrial companies to evaluate the expected impact of the first-time application of the ESMA guidelines. Papa et al.…”

Section: Methodsmentioning

confidence: 99%

“…So far, the regulatory activities in Europe are analysed in ten articles (2.4%), providing similar results as for U.S. regulation. For example, Magli et al (2017) conduct a survey of employees in investor relations departments of Italian listed industrial companies regarding the impact that companies expect from the first-time application of the ESMA guidelines in 2016. They find that "[t]he entities do not expect significant changes because, in most cases (98%), the entities that use APMs already reconcile these with financial statements figures".…”

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confidence: 99%

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Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Herr

Lorson

Pilhofer

2022

Schmalenbach J Bus Res

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For more than two decades, the reporting of so-called ‘alternative performance measures’ (APMs) has been a common phenomenon in external financial reporting. APMs are voluntarily disclosed and generally unaudited performance measures. Typically, APMs modify earnings measures calculated in accordance with generally accepted accounting principles (GAAP) by (subjectively) adjusting certain earnings components. In the academic literature, with the information motive on the one hand and the motive of (adversarial) investor influence on the other hand, two alternative explanations for the voluntary reporting of alternative performance measures are discussed, which are difficult, if not impossible, for external stakeholders to disentangle. Taking into account the recent developments in more than 250 published articles in the last decade, this paper critically reviews a wide range of literature from the United States (U.S.), Europe and, to a less extent, Australia/Asia. In particular, we analyse a comprehensive sample of more than 400 research papers published in academic and professional journals as well as other publications which are important in the academic discourse. The purpose of this paper is to identify relevant research gaps that provide starting points for future research. For this purpose, our methodological approach strictly follows structured literature review (SLR) methodology in order to minimise researcher idiosyncrasies. Thus, our SLR facilitates a decided derivation of research gaps based on a reliable and valid analytical framework which has been deductively derived from previous research.

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Section: Results: Insights and Critiquementioning

confidence: 85%

Section: Discussion Of Future Research Pathsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

Alternative Performance Measures: A Structured Literature Review of Research in Academic and Professional Journals

Herr

Lorson

Pilhofer

2022

Schmalenbach J Bus Res

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“…In 2015, the European Securities and Markets Authority (ESMA) issued new guidelines (NGL) regarding APMs. The reason was that financial statements reflected data and other information according to applicable accounting standards, although entities use APMs not required by accounting principles to communicate financial information and results (Magli, Nobolo, & Ogliari, 2017).…”

Section: Alternative Performance Measuresmentioning

confidence: 99%

The Effects on Financial Leverage and Performance: The IFRS 16

Magli¹,

Nobolo²,

Ogliari³

2018

IBR

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This paper analyses the potential impacts of the introduction of a new accounting standard, International Financial Reporting Standard 16 (IFRS 16) -Leases, on financial leverage and performance of entities. This new accounting standard was introduced on 13 January 2016, and will become effective on 1 January 2019; it will have material impacts on the financial statements of listed companies adopting IFRS and change the basic principles of the current accounting system. Our aim is to estimate the impacts of the application of IFRS 16 on listed issuers of financial statements and the different impacts that the new standard could have in different activity sectors. This research estimates the effects of IFRS 16 on the ratios of debt/total assets, EBITDA/revenues and debt/equity. The conclusions summarize the effects on entity performance and net financial position. The research shows that in the financial statements of the lessee, there will be important changes. In particular, in the balance sheet, there will be an increase in lease assets, an increase in financial liabilities and a decrease in equity, while in the income statement, there will be an increase in EBITDA and an increase in finance costs. The impact of the application of IFRS 16 will be different depending on the use of operating lease contracts among the different business sectors. Leases are an important and flexible source of financing; listed companies, using IFRS and U.S. GAAP, are estimated to have around US$ 3.3 trillion in lease commitments. Finally, this study aims to analyse the possible impacts of communication of entities, focusing on alternative performance measures.

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