Non-IFRS Measures Explained

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schema: foundry-doc-v1
title: "Non-IFRS Measures Explained"
slug: non-ifrs-measures-explained
category: reference
type: topic
content_type: topic
quality: complete
short_description: "Non-IFRS financial measures explained: NOI, FFO, AFFO, and capitalization rate as supplementary metrics that do not replace IFRS statements."
status: active
audience: public
bcsc_class: public-disclosure-safe
language_protocol: PROSE-TOPIC
last_edited: 2026-07-03
editor: pointsav-engineering
paired_with: non-ifrs-measures-explained.es.md
---

Several of the financial metrics used throughout this wiki, and defined in detail in
[[cre-financial-metrics|Commercial Real Estate Financial Metrics]], are not measures defined or required by
International Financial Reporting Standards. Real estate reporting practice relies on a set of
industry-standard supplementary measures because IFRS-defined net income does not, by itself,
capture the operating performance metrics that commercial real estate investors, lenders, and
appraisers use to evaluate a property. This article explains what a non-IFRS measure is, which
measures used in this wiki fall into that category, and how they relate to the audited IFRS
financial statements.

## What makes a measure "non-IFRS"

A non-IFRS measure — sometimes called a non-GAAP measure in other jurisdictions — is a
financial metric that is not defined under the applicable accounting standard, is calculated
using a methodology that may vary between companies, and is presented in addition to, not in
place of, the standardized measures required by IFRS. Because non-IFRS measures are not
standardized, a measure with the same name calculated by two different companies may not be
directly comparable unless each company's calculation methodology is disclosed and reviewed.

## Non-IFRS measures used in this wiki

**Net operating income (NOI).** Income from property operations after operating expenses but
before debt service, capital expenditure, depreciation, and tax. NOI is not an IFRS line item;
it is a supplementary operating measure used to evaluate a property independent of its
financing structure and capital expenditure decisions. See [[cre-financial-metrics|Commercial Real Estate
Financial Metrics]] for the full definition, including the distinction between cash NOI and GAAP
NOI.

**Funds from operations (FFO) and adjusted funds from operations (AFFO).** FFO and AFFO are
standard real estate industry measures of distributable income that adjust IFRS net income by
removing non-cash depreciation and, for AFFO, normalizing maintenance capital expenditure.
Neither measure is defined under IFRS; both follow industry-standard definitions established by
real estate industry associations, applied consistently across the metrics used in this wiki.

**Capitalization rate (cap rate).** A market-derived valuation ratio — NOI divided by market
value — used to estimate or interpret property value. Capitalization rate is a valuation tool
drawn from observed market transactions, not an IFRS-defined accounting measure.

**Interest coverage ratio (ICR).** The ratio used as the [[interest-coverage-ratio|distribution-gating
covenant]] throughout the [[direct-hold-solutions-structural-comparison|Direct-Hold Solutions]] structure — net operating income
divided by interest obligations — is a covenant and operating metric, not an IFRS-defined
measure, although it is calculated from figures that trace back to the audited financial
statements.

## Reconciliation to IFRS measures

Where a non-IFRS measure is presented in a formal disclosure document, applicable securities
law requires a reconciliation showing how the non-IFRS measure is derived from the most
directly comparable IFRS measure — typically net income. This wiki's articles describe how each
non-IFRS measure is calculated in general terms; the specific reconciliation for a given
reporting period appears in the [[about-financial-reporting|financial statements and MD&A]] filed for that
period, not in this wiki.

## These measures supplement, not replace, IFRS statements

Non-IFRS measures used throughout this wiki are presented as a supplement to, and are not a
substitute for, the audited financial statements prepared in accordance with IFRS. They should
not be considered in isolation from, or as a substitute for, the IFRS measures reported in a
reporting issuer's financial statements, and they may not be comparable to similarly titled
measures presented by other companies.

## See also

- [[cre-financial-metrics|Commercial Real Estate Financial Metrics]] — full definitions of NOI, FFO, AFFO, and related measures
- [[about-financial-reporting|Financial Reporting]] — the IFRS financial statements these measures supplement
- [[forward-looking-statements-advisory|Forward-Looking Statements Advisory]] — the companion advisory for forward-looking language