European Securities and Markets Authority Publishes Enforcement Priorities for 2019 Financial Reports

The European Securities and Markets Authority has published its annual Public Statement on European enforcement priorities for listed companies’ 2019 financial reports. The priorities will guide the areas of focus when ESMA and relevant national enforcement authorities assess the reports. Key priorities highlighted by ESMA are:
 

• Application of IFRS: IFRS 16 has been introduced, implementing new lease reporting standards as of January 1, 2019; ESMA highlights key changes introduced by the new standards and advises issuers affected by them to closely monitor IFRS Interpretations Committee discussions and assess whether the decisions of the Committee impact their application of IFRS 16; enforcers will continue to focus on the implementation of IFRS 9 and IFRS 15 and will also pay particular attention to the implementation of its Public Statement on deferred tax assets under IAS 12;
• Non-financial information: ESMA draws issuers’ attention to the European Commission’s Guidelines on non-financial reporting and the provisions of the Accounting Directive, and intends to pay particular attention to areas such as material information, the completeness of disclosures and the balance and accessibility of the financial statements, as well as specific topics such as environmental matters and disclosure of key performance indicators; and
• Alternative performance measures: ESMA will focus on the new or amended alternative performance measures introduced by issuers in response to the implementation of IFRS 16 and notes that issuers should consider ESMA’s Guidelines on APMs, in particular the requirement that issuers provide disclosures that explain the extent of and rationale for changes to APMs to investors.

View ESMA's Public Statement on enforcement priorities.
 
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