Regulatory
Disclosures:
Alternative Performance Measures
Safe Harbor for Forecasts
Position: Issuers should have a regulatory safe harbor for forecasts of future performance so long as the information is not knowingly false, incomplete, or inaccurate.
Rationale: Such information will help investors gauge the prospects for future cash flows and, as a consequence, should benefit from the safe harbor.
Where stated: Letter to CESR on CESR's Recommendation on Alternative Performance Measures 11 July 2005 (PDF)
Forecasts and Pro-Forma Information
Position: Issuers should have to state clearly and prominently that audit attestations of forecasts and pro-forma information are not the same as an audit.
Rationale: Such prominent and clear disclosures are required to prevent unsophisticated investors from concluding that auditor attestation of such information is more thorough than it is.
Where stated: Letter to CESR on CESR's Recommendation on Alternative Performance Measures 11 July 2005 (PDF)
Forecasts and Pro-Forma Information
Position: Issuers should have to reconcile pro-forma reports and forecasts with the audited financial statements for the most recently completed financial year.
Rationale: Reconciling alternative performance measures with audited financial statements will give investors a better understanding of the origins of the alternative measures and enable them to decide whether such measures are relevant.
Where stated: Letter to CESR on CESR's Recommendation on Alternative Performance Measures 11 July 2005 (PDF)