Due to the coronavirus pandemic, the European Securities and Markets Authority (ESMA) has published new Q&As on its guidelines for alternative performance measures (APMs). ESMA aims with this document to continue to promote common application of the guidelines in the EU countries.
The guidelines on alternative performance measures were published at the end of 2015. ESMA compiled its first Q&A for the guidelines in January 2017. The material has since then been supplemented further, most recently due to the coronavirus pandemic (COVID-19), Question 18.
ESMA's guidelines apply to alternative performance measures disclosed by issuers or persons responsible for prospectuses when they publish mandatory information and prospectuses (and add-ons). Mandatory information is all information the issuers are obligated to publish pursuant to both Chapter 17 of the Securities Market Act and the Market Abuse Regulation.
ESMA encourages issuers to improve their disclosures and include narrative information to explain how COVID-19 has impacted or is expected to impact their operations and profitability rather than adjusting existing alternative performance measures or including new measures.
An alternative performance measure, according to the guidelines, refers to a financial measure of historical or future earnings, financial position, financial performance or cash flows. It is not a financial measure defined by or specified in applicable rules for financial reporting (e.g. IFRS and the Annual Accounts Act).