Non-IFRS Earnings Measures in Annual Reports of European Companies

The article examines disclosure of non-IFRS earnings measures (also called alternative performance measures). The data sample consists of 600 companies that constitute index EUROSTOXX 600 for the years 2021 and 2022. We prove that non-IFRS earnings measures hold a very prominent role in financial reporting. We provide evidence that the reporting of solely IFRS earnings measures in annual reporting is very rare, with only 3% of companies use only IFRS measures. On the contrary, a substantial number of companies (74%) include adjusted non-IFRS measures into unaudited parts of annual reports. Moreover, 25% of companies put adjusted non-IFRS measures into their audited income statements. Our findings enlighten how widespread non-IFRS measures are among European companies and how the European institutions approach this practice of financial reporting.