Global securities regulators issued a statement today setting out their expectations for issuers that deviate from typical accounting treatments in their financials.

The International Organization of Securities Commissions (IOSCO) issued a proposed statement on the use of so-called non-GAAP financial measures, which sets out its expectations for issuers when using financial metrics that are not prescribed under generally accepted accounting principles (GAAP). IOSCO says that the proposed 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.”

IOSCO notes that non-GAAP financial measures can be useful for both issuers and investors “because they can provide additional insight into an issuer’s financial performance, financial condition and/or cash flow.” It says that they can also allow issuers greater flexibility “in communicating useful, entity-specific information.”

However, the regulatory group also warns that problems can occur when non-GAAP financial measures are “presented inconsistently, defined inadequately, or obscure financial results determined in accordance with GAAP.” And, it says that the use of non-GAAP measures also hampers comparability between issuers, as they typically lack standardization.

In its statement, IOSCO stresses that sufficient information should accompany non-GAAP financial measures “to help provide investors with an understanding of the messages that the measures are intended to convey, such that investors are not confused or misled if they rely on them.” It says that it is important that the issuers provide transparency with non-GAAP financial measures, and that they clearly disclose how these measures are calculated.

It also says that while it aims to assist in providing clear disclosure of non-GAAP financial measures, “their presentation in accordance with the proposed statement is not a substitute for compliance with national regulatory requirements.”

IOSCO is seeking comments on its proposed statement by December 5.