Europe's property companies need to move toward standard reporting practices to enable investors to transparently compare firms across the industry, the European Public Real Estate Association, EPRA, said as it launched its Best Practices Policy Recommendations.
"Standard financial reporting practices are critical for allowing investors to compare the financial results of listed property companies across Europe," commented Philip Charls, Chief Executive of the association. "We hope that providing guidance in this important area will ultimately boost investment flows into the industry."
While listed property firms in Europe report in accordance with International Financial Reporting Standards (IFRS), specific additional guidance in some areas is needed to ensure uniform performance reporting and presentation between real estate companies, the report stated. EPRA has therefore tailored this guidance in order to achieve uniform accounting and valuation principles among its members.
IFRS is also "format free" regarding the presentation of the balance sheet, profit and loss accounts and cash flow statements, the report noted, and the Best Practices Committee policy recommendations therefore propose standard formats for the presentation of these accounts. For the first time, these formats are shown with figures in order to make it easier for companies to adopt the recommendations.
Additional notes and disclosure items, based on uniform recommended standards, are often also needed, according to Hans Gr