Market analysts are welcoming moves by the Financial Markets Authority to tighten the use of underlying and normalised profit by firms when reporting their results.
But some are wary new guidelines may go too far and prevent firms from sharing useful information.
Milford Asset Management executive director Brian Gaynor says he's become increasingly worried about the use of alternative profit measures, and a few companies are beginning to abuse the system.
Mr Gaynor says stricter rules would prevent firms from cooking the books.
He says he's concerned that executive bonuses are based on normalised or underlying profit rather than IFSR (International Financial Reporting Standards) profit.
Mr Gaynor says there's an incentive to report underlying profits which are higher than the accepted accounting standard profits.
He says the move by the FMA is likely to be welcomed by investors.
Mr Gaynor says he's expecting a lot of debate about what the guidance should involve, but he thinks it is possible to find a measure that accurately reflects firms' performance, even when accounting for one-off or unusual items.
The Institute of Directors also welcomes a more consistent, transparent approach.
But chief executive Ralph Chivers does not want it to discourage companies from providing extra information which investors may find useful.
For example, he says a lot of businesses have been affected by the Christchurch earthquakes, and although the underlying basics of their business may still be quite sound, the financial statements for this year would be quite poor.
Mr Chivers says there's value in allowing people some flexibility to present other information.
The FMA says will carefully consider similar guidance being released by the Australian Securities and Investments Commission later this month, before issuing any guidelines.
It hopes the new guidelines will be in place for the 2013 reporting season.
