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The common enforcement priorities related to 2019 IFRS financial statements include:
• specific issues related to IFRS 16 Leases given the need to exercise significant judgement in its application, particularly in determining the lease term and the discount rate;
• improvement of the information provided under standards that became applicable in 2018 IFRS financial statements: o IFRS 9 Financial Instruments for credit institutions – relating to expected credit losses and significant increase in credit risk, and IFRS 15 Revenue from Contracts with Customers for corporate issuers, which should be of focus where revenue recognition is subject to significant assumptions and judgements; and
• the application of IAS 12 Income regarding deferred tax assets arising from unused tax losses.
ESMA highlights the principles of materiality and completeness of disclosures which should guide the reporting of non-financial information, including the importance of reporting information in a balanced and accessible fashion. This should include disclosures of non-financial information focusing on: environmental and climate change-related matters, key-performance indicators, the use of disclosure frameworks and supply chains. In addition, ESMA reminds issuers of the importance of providing adequate disclosures to enable users to understand the rationale for, and usefulness of, any changes to their disclosed APMs, especially regarding changes due to the implementation of IFRS 16.