ESMA announces enforcement priorities for 2019 financial statements

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22 Oct 2019

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2019 financial statements will focus on.

The common enforcement priorities related to 2019 IFRS financial statements include:

  • specific issues related to the application of IFRS 16 Leases;
  • follow-up of specific issues related to the application of IFRS 9 Financial Instruments for credit institutions and IFRS 15 Revenue from Contracts with Customers for corporate issuers; and
  • specific issues related to application of IAS 12 Income Taxes (including application of IFRIC 23 Uncertainty over Income Tax Treatments).

ESMA also highlights potentially significant implications of transition from one interest rate benchmark rate to another on financial reporting and the importance of timely disclosure of its consequences.

In addition, this year’s priorities highlight the requirements to disclose non-financial information, with a focus on environmental matters, and specific aspects of ESMA’s Guidelines on Alternative Performance Measures. ESMA also highlights the importance of disclosures analysing the possible impacts of the decision of the United Kingdom to leave the European Union.

Additionally, the harmonised electronic format for issuers’ annual financial reporting (the European Single Electronic Format, ESEF) will apply to annual financial reports containing financial statements for financial years beginning on or after 1 January 2020. ESMA expects issuers to undertake all the necessary steps to ensure compliance with the new requirements on a timely basis.

ESMA and European national enforcers will monitor and supervise the application of the IFRS requirements outlined in the priorities, 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 will publish its findings in a separate report.

Please click for the following documents on the ESMA website:

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