One of the priorities for the 2017 year-end according to ESMA are disclosure of the expected impact of implementation of major new standards in the period of their initial application, i.e IFRS 9, IFRS 15 and IFRS 16.
Further ESMA, together with enforcers, will pay particular attention to specific recognition, measurement and disclosure issues of IFRS 3 Business Combination and specific issues of IAS 7 Statement of Cash Flows.
ESMA and enforcers selected these topics based on the expected significant changes that the new requirements will introduce to current accounting practices and issues identified when examining financial statements.
In the light of their continuing relevance, ESMA and enforcers will continue to assess relevant issues monitored in previous years. These include, for instance, presentation of financial performance as well as disclosure on the impact of the decision of the United Kingdom to leave the European Union (Brexit). With regards to the other sections of the annual financial reports, ESMA highlights the requirements with regards to the disclosure of non-financial information and the ESMA Guidelines on Alternative Performance Measures.
Summary of the results of the fact finding exercise on IFRS 9 and IFRS 15
ESMA has also published a report as they have collected information from national enforcers with respect to 2016 IFRS annual financial statements and 2017 IFRS half-year interim financial statements published by listed European companies. The focus of this fact finding exercise is to evaluate the transparency and effectiveness of disclosure on the impact of the implementation of the new standards in the industries that are expected to be most impacted by the changes in the accounting requirements. These include credit institutions with regards to disclosures related to the implementation and transition impact of IFRS 9 and non-financial issuers mainly in construction, telecommunication, software industries as well as in utilities and industrial companies in relation to disclosure of implementation and impact of IFRS 15.
The exercise showed that only a limited proportion of issuers provided both qualitative and quantitative disclosure on the expected impact of the new standards and that the quality of disclosure varied across the European Economic Area.
ESMA 2017/32-63-340 European common enforcement priorities for 2017 IFRS financial statements
ESMA 2015/1415 Guidelines on Alternative Performance Measures
ESMA 2017/32-63-364 Summary of results of the fact finding exercise on IFRS 9 and IFRS 15