Featured Product

    ESMA Demands Transparency on COVID Impact in Interim Financial Reports

    May 20, 2020

    ESMA published a statement addressing the implications of COVID-19 pandemic on the half-yearly financial reports of listed issuers. The statement addresses the preparation of the interim financial statements according to IFRS and the interim management reports for the 2020 half-yearly reporting periods. It highlights the need for entities to provide updated information that is useful to investors to adequately reflect the current and expected impact of the COVID-19 situation on the financial position, performance, and cash flows of issuers. ESMA also highlights the importance of providing information on the identification of the principal risks and uncertainties to which issuers are exposed.

    The COVID-19 outbreak may have triggered financial risks that were fully or partly unknown or not relevant at the end of the last annual reporting period. Events and transactions that might unveil these risks include, for example, debt re-negotiations, new financial arrangements, and the breach of debt covenants. In this respect, ESMA reminds issuers of the importance of providing disclosures regarding those risks and to consider the requirements in IFRS 7 Financial Instruments: disclosures regarding, in particular, the exposures of issuers to credit, liquidity, and other risks and the related sensitivities, to provide the necessary updates of the information presented in the latest annual financial statements. ESMA highlights that some of these disclosures are also relevant in relation to the calculation of expected credit losses in accordance with IFRS 9, including disclosures to explain the assumptions and judgments applied and other considerations addressed in the ESMA statement. ESMA also recommends that issuers should closely monitor developments in relation to accounting for COVID-19-related lease concessions based on the expected IASB amendments to IFRS 16 and the related endorsement process at European level, where material to their specific situation.

    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 examinations and taking corrective actions where appropriate. ESMA will collect data on how EU-listed entities have applied the recommendations and will take into account those findings, among other considerations, in setting the enforcement priorities for the annual financial statements for 2020. These findings will be reported in the ESMA report on the 2020 enforcement activities.


    Related Links

    Keywords: Europe, EU, Banking, Securities, COVID-19, Financial Statements, IFRS 9, Reporting, Disclosures, IFRS 16, ESMA

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582