IOSCO issues final statement on non-GAAP financial measures

The International Organization of Securities Commissions (IOSCO) has finalised its guidance setting out IOSCO’s expectations for issuers with respect to the presentation of financial measures other than those prescribed by Generally Accepted Accounting Principles (GAAP), so called ‘non-GAAP financial measures’.

The IOSCO guidance is contained in the Statement on Non-GAAP Financial Measures, which sets out IOSCO’s expectations for the presentation of such measures by issuers, including that sufficient information should accompanying non-GAAP financial measures to aid in their understanding and that the measures should be presented transparently and with disclosure of how they are calculated.

The statement provides specific expectations in the following broad categories:

Defining the non-GAAP financial measure. This encompasses providing a clear explanation of the basis of calculation, clearly labelling measures such that they are distinguished from GAAP measures, explaining why the measures are useful, and explicitly stating the non-GAAP measure does not have a standardised meaning and may not be comparable between entities.

Unbiased purpose. This requires that non-GAAP financial measures should not be used to avoid presenting adverse information to the market.

Prominence of GAAP measures versus non-GAAP financial measuress. Non-GAAP measures and their most directly comparable GAAP measures should be presented with equal prominence, or the GAAP measure given greater prominence, and non-GAAP measures should not in any way confuse or obscure the presentation of GAAP measures.

Reconciliation to comparable GAAP measures. Reconciliations should be provided between non-GAAP financial measures and their most directly comparable GAAP measure presented in the financial statements, with adjustments explained and reconcilable to the financial statements or information about how they are calculated provided.

Presentation of non-GAAP financial measures consistently over time. Measures should generally remain consistent from period to period, include comparative information, with any changes in composition explained and also reflected in comparative information and discontinued use of a non-GAAP measure sufficiently motivated.

Recurring items. Items that are reasonably likely to affect past and future periods, such as restructuring costs and impairment losses, should not be described as non-recurring, infrequent or unusual.

Access to associated information. The information that issuers provide regarding non-GAAP financial measures should be readily and easily accessible to third parties.

The statement is intended to be used by entities applying International Financial Reporting Standards (IFRSs) and other accounting principles.


Axia Consultants : (Service Level Agreement) Metrics

Tips for creating SLA metrics and measuring service performance

Build performance measurement into your SLA, when you set it up – consider the following points:

  1. Identify the most important SLA outcomes first – and then determine clear metrics to track those outcomes.
  1. Create a range of (say 10) simple metrics, such as targets, kpi’s (key performance indicators), that are easily understandable.
  1. Ensure the metrics are relevant and match the key business needs of your SLA.
  1. Clearly, the metrics should also be measurable/quantifiable and unambiguous.
  1. Base your metrics on your specific SLA requirements and needs – rather than readily available data, existing reports, or generic SLA metrics applicable for such services.
  1. Design the metrics to measure different performance problems that your SLA / service provider may have.
  1. Metrics should be mutually exclusive and not duplicate each other. Each metric should focus on a different potential problem.
  1. The metrics should be comprehensive enough, such that if your service provider fails to meet the required performance, at least one of the metrics will be triggered.
  1. Review and test the metrics, to confirm they will pick up the undesirable problems.
  1. Agree the metrics between both parties – service provider and customer
  1. For each Service Level metric include:
  • a reference name
  • a description
  • measurement parameters eg data sources
  • calculation formula and frequency
  • a baseline performance
  • the required performance or target, from a service provider
  • remedies and penalties for poor or non-performance eg monetary credits
  • any specific exclusions/exceptions


  1. Set up an automatic monitoring of the metrics, wherever possible.
  1. Set up alerts for exception reporting.
  1. Monitor performance (metrics) on a regular basis. Make it one of your regular daily or weekly tasks.
  1. Raise any performance issues at your regular service review meetings.
  1. Review metrics and when required amend them, to ensure they continue to be relevant to your service needs.

Axia Consultants Writing Service Level Agreements

10 tips for writing better Service Level Agreements

  1. Ensure all key terms are clearly defined eg SLA scope, customer and provider responsibilities, reporting, service expectations, performance indicators, escalation, remedies and penalties. Make sure you understand them. If you do not, or have queries – ask!
  1. Include the option to change the SLA in the future. Businesses and technology change rapidly. So if the SLA is to remain relevant, it will need to be updated as required.
  1. Include the provision for regular SLA reviews. Six-monthly would be ideal, but failing that – annually, to manage changing circumstances.
  1. Make sure you have a ‘get-out’ clause. It is important to be able to terminate the SLA under certain conditions eg exceptionally poor performance, major problems, significant changes to services.
  1. Include performance-monitoring criteria within the SLA. Plus, include automatic penalty credits for non-compliance of performance. Better to build this into the SLA from the start, than negotiate each time it occurs.
  1. Writing the SLA should be a joint effort between customer user and IT staff and the service provider. Input and agreement from all is required. One party should not dictate or force SLA terms on the others!
  1. Allow sufficient time to prepare, negotiate and agree, a comprehensive and relevant SLA. The quality of the SLA is improved by not rushing and taking more time, whatever the project time pressures.
  1. Look out for exceptions within the SLA. Ensure you understand them and their potential impact on the overall SLA.
  1. Look out for third party components within the SLA. Ideally, one service provider would provide the entire service. However, there may be input or reliance from other third parties. So check who is responsible for what, and whether it is included or excluded from the SLA.
  1. Carefully review your SLA. Make sure it is easy to understand by all – even non-technical users. Does it cover everything? See our SLA Checklist. Does it meet your business and service requirements? Are you satisfied with it?