The consultation page can be accessed here. Please note that you need to register in order to access the public consultation.

In 2019, the European Securities and Markets Authority (ESMA) was commissioned by the EC to carry out research on potential short-term pressures in securities markets. The results, published in December 2019, included the finding that ESMA's investigation did not identify any need for amending existing accounting requirements. Rather, ESMA suggested three other areas where decisive action would support long-term investment behaviour:

• amending the Non-Financial Reporting Directive to establish principles for high quality non-financial information along with a limited set of specific disclosure requirements;
• promoting a single set of international ESG disclosure standards; and
• requiring the inclusion of non-financial statements in annual financial reports.

Notwithstanding these findings, the new EC consultation document contains the following question:

Question 16: Do you see any further areas in existing financial accounting rules (based on the IFRS framework) which may hamper the adequate and timely recognition and consistent measurement of climate and environmental risks?

The question can be answered with yes/no/don't know. However, only when answering "yes", a new question 16.1 pops up that allows the respondent to elaborate. Four areas where the accounting rules may prove contrary to sustainable finance are then suggested (impairment and depreciation rules, provision rules, contingent liabilities, and other) and it is possible to provide details.

Please click to access the consultation on the EC website. Comments are requested by 15 July.

In the draft comment lettert, EFRAG welcomes the tentative decisions taken by the IASB during its deliberations on the second phase of its project on the IBOR reform. In particular, EFRAG supports providing a practical expedient allowing an entity to apply paragraph B.5.4.5 of IFRS 9 Financial Instruments to account for modifications related to IBOR reform; supports the tentative decisions taken on hedge accounting; and observes that the proposed disclosures will assist users of financial statements in understanding the effects of IBOR reform on an entity.

​EFRAG notes the IASB proposal to clarify that a change in the basis on which the contractual cash flows are determined after initial recognition of financial instrument constitutes a modification even if the​ contractual terms of that financial instrument are not amended. As an assessment of the impact of this clarification is not possible within the limited timeframe available for this urgent project, EFRAG agrees with this proposal provided that this new definition is limited to the changes directly related to the IBOR reform.

Comments on EFRAG's draft comment letter are requested by 15 May 2020. For more information, see the press release and the draft comment letter on the EFRAG's website.

The main activities of EFRAG in this context are the EFRAG draft comment letter and field-testing on the exposure draft. Please click for more information in the press release on the EFRAG website.

The update reports on the EFRAG Board meeting on 17 March, the EFRAG Technical Expert Group (TEG) meeting on 4 and 5 March and webcast on 20 March, the EFRAG TEG and EFRAG User Panel meeting on 4 March 2020, the EFRAG TEG and EFRAG Consultative Forum of Standard Setters (EFRAG CFSS) meeting on 25 March and the European Lab Steering Group meeting on 6 March.  

The update also lists EFRAG publications issued in March: 

• EFRAG's pre-consultation document, in anticipation of the IASB's forthcoming Exposure Draft IBOR Phase 2;
• EFRAG's announcement of the composition of the EFRAG Advisory Panel on Intangibles;
• EFRAG and the IFRS Foundation Trustees's jointly published article on the networking stakeholder event co-hosted with the IFRS Foundation Trustees on 18 February 2020;
• EFRAG's letter to the IASB requesting them to consider extending some of the consultation periods on recent or soon to be issued publications as in response to the Covid-19 pandemic;
• EFRAG's Letter to the IASB on amendments to IFRS17 Insurance Contracts;
• EFRAG's invitation for companies to participate in the field-test on the IASB's project Primary Financial Statements; and
• EFRAG's call for candidates to become members of the new Project Task Force on reporting of non-financial risks and opportunities and linkage to the business model of the European Lab.

Please click to download the March EFRAG update from the EFRAG website. 

On 17 December 2019, the IASB published the exposure draft of a new standard General Presentation and Disclosures that is intended to replace IAS 1 Presentation of Financial Statements.

The panel in these webinars will discuss the benefits of the proposed new presentation of the income statement, the guidance on management performance measures, and the definition and disclosure of unusual income and expenses, using real-life examples. The panel will also talk about potential further improvements.

For more information, see the press release on EFRAG’s website.

Following the joint online outreach events, EFRAG, in collaboration with EFFAS, BVFA/ABAF and the IASB, has published a summary report of the events for the convenience of European constituents. 

For more information, refer to the press release and summary report on EFRAG's website. 

The new question

• highlights the main principles of the APM Guidelines;
• encourages issuers to use caution when adjusting APMs and when including new APMs to address the impact of COVID-19; and
• invites issuers to provide
  • narrative information regarding the modifications made, the assumptions used and the impact of COVID-19; and
  • information on measures taken or expected to be taken by issuers to address the impact that the COVID-19 outbreak may have in their operations and performance.

Please click to access the updated document on the ESMA website.

The European national enforcers of financial information monitor and review financial statements published by issuers with securities traded on a regulated European market and who prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) and consider whether they comply with IFRS and other applicable reporting requirements, including relevant national law.

ESMA has developed a confidential database of enforcement decisions taken by individual European enforcers as a source of information to foster appropriate application of IFRS.

The publication of enforcement decisions is designed to inform market participants about which accounting treatments European national enforcers may consider as complying with IFRS, i.e. whether the treatments are considered as being within the accepted range of those permitted by IFRS. ESMA considers the publication of the decisions, together with the rationale behind them, will contribute to a consistent application of IFRS in the European Union.

Topics covered in the latest batch of extracts, covering the period from May 2018 to October 2019, include:

Click for access to the full report (link to ESMA website). The ESMA has also published an updated overview of all enforcement decisions ever published.

European enforcers examined the financial statements of about 950 issuers representing an average examination rate of 17% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 299 actions taken to address material departures from IFRS.

Enforcers also assessed the non-financial information related to ESG for 937 issuers, covering approximately 35% of the total estimated number of issuers required to publish a non-financial statement, resulting in 95 enforcement measures.

In addition, 712 management reports were reviewed for evaluating compliance with ESMA’s guidelines on alternative performance measures, covering around 13% of all IFRS listed issuers in Europe against which were taken 109 corrective actions.

Please click to access the full report on the ESMA website.

The amendments are aimed at resolving the difficulties that arise when an entity determines whether it has acquired a business or a group of assets.

The European Union effective date is the same as the IASB effective date (1 January 2020).

The Commission Regulation amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council was published in the Official Journal of the European Union on 22 April 2020.

EFRAG has updated its endorsement status report to reflect that the European Union has adopted the amendments.