The International Organization of Securities Commissions (Iosco) has issued a proposed statement on Non-Generally Accepted Accounting Principles (GAAP) financial measures. The new statement sets out Iosco's expectations for issuers with respect to their presentation of financial measures other than those prescribed by GAAP.

The statement is intended to assist issuers in providing clear and useful disclosure for investors and other users of non-GAAP financial measures, and to help reduce the risk that such measures are presented in a way that could be misleading.

The Iosco board seeks public comment on the proposed statement on or before December 5 2014.

Non-GAAP financial measures could be useful to issuers and investors because they can provide additional insight into an issuer’s financial performance, financial condition and cash flow. The use of non-GAAP financial measures also can provide issuers with flexibility in communicating useful, entity-specific information, according to Iosco.

Problems can arise, however, when non-GAAP financial measures are presented inconsistently, defined inadequately, or obscure financial results determined in accordance with GAAP. Furthermore, non-GAAP financial measures typically lack a standardized meaning and thus are generally not comparable from one issuer to the next.