ESMA published a statement on the priorities that European enforcers will consider when examining the 2019 annual financial reports of listed companies. The 2019 enforcement priorities reflect the changes introduced in recent financial reporting standards and consider issues identified by national competent authorities through their enforcement activities in 2019. The common enforcement priorities related to 2019 IFRS financial statements include issues related to the application of IFRS 16 on leases and follow-up of issues related to the application of IFRS 9 on financial instruments for credit institutions.
In its statement, ESMA encourages issuers to prepare for the timely implementation of recent IFRS 9 amendments, which address hedge accounting implications; also encouraged is the monitoring of developments in the EU endorsement process, which is expected to be finalized in time for the 2019 accounts. In addition, ESMA highlighted the potential financial reporting implications of transition from one interest rate benchmark rate to another one, along with the importance of timely disclosure of its consequences. ESMA is expecting issuers to undertake all necessary steps to comply with the new European Single Reporting Format (ESEF) requirements which will begin to apply with the 2020 annual financial statements. ESMA also reminded issuers of the importance of providing adequate disclosures to enable users to understand the rationale for, and usefulness of, any changes to their disclosed Alternative Performance Measures, especially regarding changes due to the implementation of IFRS 16.
ESMA and European national enforcers will monitor and supervise the application of IFRS requirements as well as any other relevant provisions outlined in the statement, with national authorities incorporating them into their reviews and taking corrective actions, where appropriate. ESMA will collect data on how EU-listed entities have applied the priorities and will report on findings regarding these priorities in its report on the 2020 enforcement activities.
Keywords: Europe, EU, Banking, Accounting, Enforcement Priorities, Financial Instruments, IFRS 9, Leases, Credit Risk, Reporting, ESEF, ESMA
Previous ArticleEC Establishes Task Force for Relations with UK for Brexit Work
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
The Hong Kong Monetary Authority (HKMA) announced that the applicable jurisdictional countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1.0%
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.