scholarly journals Non-GAAP Financial Measures: Evidence From Canada

2021 ◽  
Author(s):  
Sameera Hassan
Keyword(s):  
Stock Exchange ◽  
Exploratory Research ◽  
Toronto Stock Exchange ◽  
Financial Measures ◽  
Generally Accepted Accounting Principles ◽  
Regulatory Guidance ◽  
Pro Forma Earnings ◽  
Financial Disclosures ◽  
Core Earnings ◽  
Regulatory Proposals

This paper investigates non-GAAP financial measures voluntarily reported by Canadian companies listed on Toronto stock exchange (TSX) and Toronto Ventures Exchange (TSXV) for the year 2017. Non-GAAP measures are those that do not adhere to the requirements of generally accepted accounting principles (GAAP) and are used to communicate those aspects of firms’ operations which the firms see as relevant for the users of financial statements. This study is an exploratory research which describes current firm practices in reporting non-GAAP financial measures among three industry groups, namely Real Estate, Blockchain/Cryptocurrency and Cannabis firms. This paper also assesses the quality of non-GAAP financial disclosures in accordance with the regulatory guidance. The study is motivated by recent regulatory proposals issued by the Canadian Securities Administrators (CSA), under the National Instrument NI 52-112 and by the Accounting Standards Board (AcSB) pertaining to reporting non-GAAP performance measures. The main contribution of this study is a detailed content analysis of a sample of Canadian firms. My analysis of hand collected data from the Management Discussion and Analysis (MD&A) indicates a plethora of reported “non-GAAP financial measures” disclosed by companies. The analysis also indicates that firms are falling short on parameters such as understandability, comparability, standardization, consistency and persistence of non-GAAP financial measures which are essential under the existing guidelines, and that regulation of non-GAAP financial measures would be beneficial. The study’s findings may be relevant to regulators for formulating guidance on reporting non-GAAP measures and identifies areas of potential future studies in the area of non-GAAP financial measures. Keywords: Non-GAAP financial measures, Non-GAAP earnings, Pro forma earnings, Non-IFRS measures, Street earnings, Core earnings, Adjusted earnings and NI 52-112.

scholarly journals Non-GAAP Financial Measures: Evidence From Canada

2021 ◽  
Author(s):  
Sameera Hassan
Keyword(s):  
Stock Exchange ◽  
Exploratory Research ◽  
Toronto Stock Exchange ◽  
Financial Measures ◽  
Generally Accepted Accounting Principles ◽  
Regulatory Guidance ◽  
Pro Forma Earnings ◽  
Financial Disclosures ◽  
Core Earnings ◽  
Regulatory Proposals

This paper investigates non-GAAP financial measures voluntarily reported by Canadian companies listed on Toronto stock exchange (TSX) and Toronto Ventures Exchange (TSXV) for the year 2017. Non-GAAP measures are those that do not adhere to the requirements of generally accepted accounting principles (GAAP) and are used to communicate those aspects of firms’ operations which the firms see as relevant for the users of financial statements. This study is an exploratory research which describes current firm practices in reporting non-GAAP financial measures among three industry groups, namely Real Estate, Blockchain/Cryptocurrency and Cannabis firms. This paper also assesses the quality of non-GAAP financial disclosures in accordance with the regulatory guidance. The study is motivated by recent regulatory proposals issued by the Canadian Securities Administrators (CSA), under the National Instrument NI 52-112 and by the Accounting Standards Board (AcSB) pertaining to reporting non-GAAP performance measures. The main contribution of this study is a detailed content analysis of a sample of Canadian firms. My analysis of hand collected data from the Management Discussion and Analysis (MD&A) indicates a plethora of reported “non-GAAP financial measures” disclosed by companies. The analysis also indicates that firms are falling short on parameters such as understandability, comparability, standardization, consistency and persistence of non-GAAP financial measures which are essential under the existing guidelines, and that regulation of non-GAAP financial measures would be beneficial. The study’s findings may be relevant to regulators for formulating guidance on reporting non-GAAP measures and identifies areas of potential future studies in the area of non-GAAP financial measures. Keywords: Non-GAAP financial measures, Non-GAAP earnings, Pro forma earnings, Non-IFRS measures, Street earnings, Core earnings, Adjusted earnings and NI 52-112.

scholarly journals Human capital as an area of non-financial reporting on the example of selected companies listed on the Warsaw Stock Exchange

2020 ◽  
Vol 108 (164) ◽  
pp. 23-40
Author(s):  
Hanna Czaja-Cieszyńska
Keyword(s):  
Human Capital ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Health And Safety ◽  
Secondary Data ◽  
Freedom Of Association ◽  
Financial Reports ◽  
Financial Measures ◽  
Warsaw Stock Exchange ◽  
Financial Disclosures

The spread of the concept of sustainable development has meant that human capital is an important area of non-financial reporting. However, the complexity and multidimensionality of this category mean that employee reporting and the indicators used for it are very diverse. The purpose of the article is to assess the comparability of non-financial disclosures about human capital in the reports of selected companies listed on the Warsaw Stock Exchange. This article supplements the existing scientific achievements related to non-financial reporting, identifying the dysfunctional area of comparability. For the purposes of this study, the following research methods were used: a literature review, analysis of legal regulations, analysis of secondary data in the form of non-financial reports, as well as induction and synthesis meth- ods used in formulating applications. The ten largest companies listed in the WIG-20 index were selected for the study. The research covered non-financial reports for 2019. The study was divided into five stages, which reflect five categories of disclosures on employee issues, i.e., the level of employment and salary, relations with employees and freedom of association, occupational health and safety, development and education, and diversity and equal opportunities. Within each category, a maximum of three non-financial measures have been defined. The study confirmed that none of the non-financial reports analyzed in any of the categories were fully comparable.

Financial Reporting Regulation and the Reporting of Pro Forma Earnings

2006 ◽  
Vol 20 (1) ◽  
pp. 39-55 ◽  
Author(s):  
Gary M. Entwistle ◽  
Glenn D. Feltham ◽  
Chima Mbagwu
Keyword(s):  
Financial Reporting ◽  
Primary Objective ◽  
Public Confidence ◽  
Strong Impact ◽  
Policy Makers ◽  
Generally Accepted Accounting Principles ◽  
Pro Forma Earnings ◽  
Sarbanes Oxley ◽  
Evidence For Policy ◽  
Pro Forma

A primary objective of the Sarbanes-Oxley Act is to bolster public confidence in the U.S. capital markets. The SEC aims to achieve this objective in part by regulating the use of alternate earnings measures (colloquially referred to as “pro forma” earnings) that differ from generally accepted accounting principles. This paper examines whether firms change their reporting practice in response to pro forma regulation. Specifically, it examines whether the use, calculation, and presentation of pro forma measures by S&P 500 companies changes between 2001 and 2003. We document three significant shifts in pro forma reporting in this period. First, the proportion of firms reporting pro forma earnings declines from 77 to 54 percent. Second, by 2003, pro forma is used in a less biased manner. Not only is the proportion of firms using pro forma earnings to increase reported income smaller than in 2001, but also the magnitudes of these increases are reduced. Third, in 2003, firms present pro formas in press releases in a much less prominent and less potentially misleading manner. These results suggest a strong impact of the recent regulation of pro forma reporting and provide important empirical evidence for policy makers.

scholarly journals How the Balanced Scorecard Is Implemented in the Spanish Footwear Industry

2021 ◽  
Vol 13 (10) ◽  
pp. 5641
Author(s):  
Carlos Suárez-Gargallo ◽  
Patrocinio Zaragoza-Sáez
Keyword(s):  
Balanced Scorecard ◽  
High Grade ◽  
Exploratory Research ◽  
Online Questionnaire ◽  
Financial Measures ◽  
The Balanced Scorecard ◽  
Cause And Effect ◽  
Phone Calls ◽  
Footwear Industry ◽  
Final Sample

This paper provides a deeper knowledge of the implementation of the Balanced Scorecard (BSC) in the Spanish footwear industry, under an exploratory research which has been conducted with a final sample of seven firms. An online questionnaire was developed, supported by phone calls and a personal interview. An 18–24-month-period has been found to be enough to develop solid foundations for a BSC. Financial and non-financial measures are presented in the whole firms and in the majority of the four perspectives, linked by cause-and-effect relationships, showing a high development in the BSC implementation. BSCs with a high grade of development are more likely to identify their intangibles as well as include them in the firm’s strategy. A personal BSC has been identified as a limitation. Although the strategy is spread out with meetings in the whole firms, it is not known at all levels, showing a gap to be fulfilled. Strategy maps are key in BCS implementation: they are present in the majority of the firms and show that the performance drivers reach the strategy. Firms with a high grade of development and expectation, using both financial and non-financial measures linked by cause-and-effect relationships, are more likely to define sustainable measures, integrating them in their own BSC.

Does tick size influence price discovery? Evidence from the Toronto Stock Exchange

2002 ◽  
Vol 23 (1) ◽  
pp. 49-66 ◽  
Author(s):  
Marie-Claude Beaulieu ◽  
Shafiq K. Ebrahim ◽  
Ieuan G. Morgan
Keyword(s):  
Price Discovery ◽  
Stock Exchange ◽  
Tick Size ◽  
Toronto Stock Exchange

Financial statement effects of adopting IFRS: the Canadian experience

2018 ◽  
Vol 26 (4) ◽  
pp. 466-491 ◽  
Author(s):  
Eva K. Jermakowicz ◽  
Chun-Da Chen ◽  
Han Donker
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Financial Statement ◽  
Net Income ◽  
Cross Sectional ◽  
Toronto Stock Exchange ◽  
Content Type ◽  
Publicly Traded Companies ◽  
Interaction Terms

Purpose The purpose of this study is to examine the effects of adopting International Financial Reporting Standards (IFRS) on financial statements of the largest Canadian firms (S&P/TSX 60) listed on the Toronto Stock Exchange (TSX). Design/methodology/approach This study investigates the financial statement effects of 46 companies from the S&P/TSX 60 index which report under IFRS in 2011 and switched to IFRS from CGAAP. This study used panel data analysis, which can be considered as more powerful when conducting cross-sectional and in time analysis among companies. Because of weakness of Cramer statistic on R-square, the authors used interaction terms as suggested by Hope (2007). Findings Consistent with the authors’ perceptions, this study finds that significant effects of adopting IFRS are associated with industry practices. The empirical results show that the adoption of IFRS in Canada created more relevant financial reporting for book value of equity and net income in the post-adoption periods. Originality/value This study should be of interest to the US regulators considering IFRS adoption by US publicly traded companies as well as to regulators, standard setters and listed companies in all countries worldwide that are in transition to IFRS.

scholarly journals The importance of information upon applying IFRS in financial entities that trade at the Colombian stock market

2019 ◽  
Vol 21 (34) ◽  
pp. 137-152
Author(s):  
Miguel Angel Laverde Sarmiento ◽  
Jorge Fernando Garcia Carrillo ◽  
Juan Carlos Lezama Palomino ◽  
Alejandra Patiño Jacinto
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Stock Exchange ◽  
Regulatory Framework ◽  
General Level ◽  
Market Exchange ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Before And After ◽  
The Impact

The aim of this research is to determine whether the implementation of the International Financial Reporting Standards (IFRS) in the companies of the financial sector listed on the Colombian Stock Exchange has greater relevance compared to the previous accounting regulatory framework known as Generally Accepted Accounting Principles (GAAP) in Colombia, for the years 2009 to 2016. Taking into account the concept of valorative relevance that indicates that the accounting information is relevant if it affects the stock price reflected in the capital market exchange. To determine this relationship, an adaptation of the model proposed by Ohlson (1995) is used, because it is the most frequently used to measure relevance. The modifications made to the model were to include accounting variables of financial instruments of assets and liabilities to better measure the impact of the IFRS. On a general level, the conclusion is reached that the valorative relevance of financial companies listed on the stock exchange between 2009 and 2016, does not change due to the application of the IFRS. The results are because the regulation that financial companies that are listed on the stock exchange of Colombia are subject to has contributed to the relevance being maintained before and after the application of the new regulatory framework. however, when carrying out the study of the information taking into account only the variables and taking into account the regulations under the IFRS, they present a greater degree of significance.

scholarly journals The Lagged Effect of Advertising Expenditures on the Financial Measures of Brand Equity in the Egyptian Context

2021 ◽  
Vol 04 (09) ◽  
Author(s):  
Nermin M. Gohar
Keyword(s):  
Brand Equity ◽  
Quantitative Research ◽  
Stock Exchange ◽  
Secondary Data ◽  
Financial Reports ◽  
Financial Measures ◽  
The Impact ◽  
Corporate Brands ◽  
The Relationship ◽  
Egyptian Stock Exchange

This research intends to fill the gap in the literature by studying the impact of lagged real advertising expenditures on different perspectives of brand equity in the Egyptian context, which are: Firm-based and Market-based brand equity. The research follows the quantitative research-based approach, with the descriptive explanatory method. Secondary data was collected from firms’ financial reports of sixteen sectors for the period 2013 - 2020 to consider the effect of real advertising expenditures on firm-based and market-based brand equity models. Data was collected from 168 listed companies in the Egyptian stock exchange market, after deleting the financial institutions. The unit of analysis was the corporate brands and data collected was panel data analyzed using Eviews program – version 10, using GLS regression. Results showed that market risk significantly moderates the relationship between advertising expenditures and Firm-based and Market-based brand equity.

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