27 October 2015

ESMA: Enforcement priorities for listed companies’ 2015 financial statements

The common enforcement priorities focus on recurring issues identified in the application of IFRS requirements and the current economic climate where it may pose challenges to issuers, in particular, the current interest rate environment, foreign exchange rate and country risks. Steven Maijoor, ESMA Chair, said: “The common enforcement priorities play an important role in achieving a high level of harmonisation in the enforcement and application of IFRS across the EU. “The current financial markets conditions are expected to impact financial information and ESMA urges listed companies and auditors to pay particular attention to ensure that these impacts are correctly reflected in financial statements and investors are duly informed.” The common enforcement priorities encompass the following topics: 1. Impact of financial markets conditions on financial statements; ESMA urges listed companies and their auditors to pay particular attention to the current interest rate environment, country risk in relation to where their business is located and exposure to foreign exchange rates and high volatility for commodities. 2. Statement of cash flows and related disclosures: issuers should ensure the statement and disclosures are consistent with the other primary financial statements. 3. Fair value measurement and related disclosures: ESMA considers there is substantial room to improve measurement and disclosure related to non-financial assets and liabilities in particular.

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 early 2017.

Full press release

Statement on European common enforcement priorities for 2015

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