The statement highlights the importance of issuers accompanying users of their financial statements, so that they understand the expected accounting implications of the new standard’s application.

ESMA’s recommendations cover the disclosures of expected impacts of the initial application of IFRS 17 in the interim and annual financial statements for 2022.

Where the impact is expected to be significant, ESMA expects issuers to:

• provide information about the significant accounting policy choices to be taken upon initial application of IFRS 17 such as methods to calculate the discount rate, how the level of aggregation requirements will be applied;
• disaggregate the expected impact in a way that is useful to users of financial statements; and
• explain the nature of the impacts (on recognition, measurement and presentation) so that users of the financial statements can understand the changes and their key drivers when compared to the accounting principles on classification applied under IFRS 4.

ESMA also encourages issuers to explain the impact, if any, of the application of IFRS 17 on alternative performance measures that the issuer may use.

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