ESMA Publishes Statement on European Common Enforcement Priorities
ESMA published the annual Public Statement on European Common Enforcement Priorities, which specifies priorities that the European enforcers will consider when examining the 2018 financial statements of listed companies. This is intended to promote consistent application of the International Financial Reporting Standards (IFRS) and other financial and non-financial reporting requirements.
The 2018 enforcement priorities for IFRS financial statements reflect the relevance and magnitude of the change introduced by new reporting standards and take into account issues identified by the national competent authorities through their enforcement activities. These priorities include application of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments, for the first-time in the 2018 IFRS financial statements. Disclosure on the implementation and expected impact of IFRS 16 Leases, which will come into force in 2019, is another enforcement priority for 2018. The statement highlights the requirements to disclose non-financial information, with a focus on environmental matters, and specific aspects of the ESMA Guidelines on Alternative Performance Measures. In addition to the common enforcement priorities, ESMA highlighted specific requirements related to the sections of the annual financial report other than the financial statements (such as management reports and non-financial statements). Finally, ESMA highlighted the importance of disclosures analyzing the possible impact of the decision of the UK to leave EU.
ESMA and European national enforcers will monitor and supervise the application of the 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 European listed entities have applied the priorities and ESMA will report on findings regarding these priorities in its Report on the 2019 enforcement activities.
Related Links
Keywords: Europe, EU, Banking, Accounting, IFRS 9, IFRS 15, IFRS 16, Enforcement Priorities, ESMA
