Non-financial FTSE 100 companies are subjectively reporting exceptional items, with a majority reporting underlying earnings that exceed unadjusted operating profits, according to a new report by Standard & Poor’s Rating Services.
The report, released 18 Feb., reviewed the annual reports for the last four years of 82 non-financial companies in the FTSE 100 index. Standard & Poor’s review found that over the last four years, an average of 73 percent of the companies reported an adjusted operating profit that exceeded the International Financial Reporting Standards (IFRS) operating profit. Additionally, 43 of the 82 companies reviewed presented adjusted operating profits greater than IFRS operating profits in each of those four years. Not surprisingly, the study found that companies more often identified reconciling items that boosted adjusted profit figures than items that decreased those figures.
