REAL ESTATE - Real estate investment institutions should introduce a uniform statement on reporting on net asset value and earnings per share, the European Public Real Estate Association has advised its members.
According to EPRA, the introduction of new International Financial Reporting Standards (IFRS) has resulted in substantial changes in reporting profits and net assets.
“Companies across Europe have begun reporting their results under IFRS, and many are making various adjustments to the IFRS and the Generally Accepted Accounting Principles (GAAP) for earnings per share and net asset value, to help explain their performance to investors and analysts,” it said.
In order to get consistency in reporting, EPRA’s best practices financial reporting committee has provided guidance on an adjusted net asset value and earnings per share.
The recommendations have been established by a working group, which has been discussing the issue with finance directors, investors and analysts.
“There appeared to be a strong demand for an alternative to the GAAP measures, that could be consistently applied, and would provide complementary information to a better understanding of a company’s performance when reporting under IFRS,” it said.
“Guidance has also been provided for the situation in countries where real estate has been accounted for on the balance sheet at fair value,” the EPRA added.
The performance measures don’t replace the GAAP measures, but provide additional information, it stressed.