please answer question number 4

57173/discussion_topics/2307163?module_item_id=17296448 SB Proposes Rule Requiring More Details on Proft, Income roposal seeks to provide more transparency on a non-GAAP measure "It's not in the interest of companies that the atmosphere around non-GAAP is one of d Hans Hoogervorst. PHOTO: IFRS FOUNDATION By Mark Maurer Dec. 17, 2019 5:00 am ET The International Accounting Standards Board is proposing a new rule on how companies explain certain performance measures that go beyond generally accepted accounting princ The proposal is part of an effort by the accounting standards setter to compel companies to information to investors, Hans Hoogervorst, chairman of the IASB, said in an interview. Under the current rules, companies present revenue and profit or loss in the income statem required to provide any specific subtotals in between. The global accounting-rule system kno Financial Reporting Standards does not currently define operating profit or subtotals of incom But the IASB, which sets standards in more than 140 countries, found that companies calculat inconsistently, using several different definitions. The behavior was confusing for investors, wh profit to assess a company's margins and to help with forecasting future cash flows, Mr. Hooger The new rule would require companies to provide three new subtotals: operating profit; pront income tax; and another subtotal consisting of operating profit, income and expenses from integ joint ventures Businesses also would be required to disclose information about certain management performar are a type of non-GAAP practice, in a note in their financial statements. Companies would have to management performance measures provide useful information, how they are calculated, and how most comparable profit subtotal specified by existing standards. Investors consider management performance measures helpful for understanding how a company results, but they have expressed concerns about the quality of the disclosures, Mr. Hoogervorst sai It's not in the interest of companies that the atmosphere around non-GAAP is one of distrust that unbalanced," he said. "But they might see that this new alternative is in their interest." The proposed changes could result in one new standard and changes to at least six existing standard asked for feedback over a period scheduled to run for more than six months, until June 30. The board wo1 Financial Manager X Topic: Jan 20 - 26 Discussion x C Sign In or Sign Up | Chegg.com 7173/discussion_topics/2307163?module_item_id=17296448 anagement performance measures provide useful information, how they are calculated, and how they ost comparable profit subtotal specified by existing standards. vestors consider management performance measures helpful for understanding how a company views i sults, but they have expressed concerns about the quality of the disclosures, Mr. Hoogervorst said. t's not in the interest of companies that the atmosphere around non-GAAP is one of distrust that they ar mbalanced," he said. "But they might see that this new alternative is in their interest." The proposed changes could result in one new standard and changes to at least six existing standards. The la sked for feedback over a period scheduled to run for more than six months, until June 30. The board does the standard to go into effect until 2021 at the earliest. The IASB and the U.S. standards setter, the Financial Accounting Standards Board, have worked to set stand similar principles since abandoning in 2011 a joint effort to make their standards identical. The FASB has no tandards comparable to the IASB's proposals on non-GAAP transparency and profit subtotals. The U.S. Secur ind Exchange Commission, however, requires companies' earnings disclosures to reconcile adjusted measures GAAP figures. The FASB intends to monitor progress on the IASB's proposed standard to see if there are opportunities to im generally accepted accounting principles in the U.S. a spokeswoman for the U.S. standards setter said. SUMMARY:The International Accounting Standards Board (IASB) has issued a proposal to compel companies provide more detailed information to investors" both on the face of the financial statements and in relation to GAAP metrics. The proposal would add requirements to disclose three specifc sub-totals on the statement of p and loss (income statement). It also would require reporting entities to disclose information about certain management performance measures, which are a type of non-GAAP practice." in one note to the financial staten Comment letters are due to the IASB by June 30, 2020, QUESTIONS: 1. What are non-GAAP measures? Cite your source for the definition you provide. 2. How can non-GAAP measures provide useful financial information beyond that reported in the financial statements prepared according to GAAP, whether IFRS or U.S. GAAP? 3. Consider IASB Chair Hans Hoogervorst's concern that the atmosphere around non-GAAP is one of distrust." What leads to that distrustful atmosphere? 4. How does the proposed standard help resolve this issue of distrust? P les Motikely to Revise Einancial Statements