The ESMA public statement is a reaction to the perceived disclosure overload and the tendency to provide boilerplate disclosures. While ESMA commends initiatives taken up by standard-setters (not least by the IASB in its Disclosure Initiative) and even enforcers (for example in Danmark), ESMA states that relatively few issuers have taken action so far. Therefore, ESMA has developed five disclosure principles issuers should consider regarding the disclosures made in annual reports:

1. Telling the entity’s own story by focussing on entity-specific disclosures and avoiding boilerplate language.
2. Providing relevant information that is necessary to understand the issuer’s financial performance and position in the financial statements in an easily accessible way.
3. Thinking about materiality and applying the IFRS materiality principle.
4. Promoting readability of the financial statements by producing information that is written in as clear and concise a way as possible.
5. Providing consistent information within annual reports.

Please click for addition information on the ESMA website:

• Press release
• Public statement on improving the quality of disclosures in the financial statements