ESMA Releases Enforcement Priorities for 2019 Annual Financial Reports

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.

Related Links

• Press Release
• Statement (PDF)

Keywords: Europe, EU, Banking, Accounting, Enforcement Priorities, Financial Instruments, IFRS 9, Leases, Credit Risk, Reporting, ESEF, ESMA