European common enforcement priorities for 2018 annual financial reports
The European Securities and Markets Authority (ESMA) has published its annual Public Statement defining the European Common Enforcement Priorities and highlighting other considerations for 2018 annual financial reports of listed companies. The common priorities encompass:
- Specific issues related to the application of IFRS 15 Revenue from Contracts with Customers;
- Specific issues related to the application of IFRS 9 Financial Instruments; and
- Disclosure of the expected impact of implementation of IFRS 16 Leases.
Furthermore, in light of their continuing relevance, ESMA and enforcers will continue to assess relevant issues monitored in previous years, which were:
- Presentation of financial performance
- Financial instruments: distinction between equity instruments and financial liabilities:
- Disclosure of the expected impact of implementation of major new standards in the period of their initial application
- Specific recognition, measurement and disclosure issues of IFRS 3 Business Combinations
- Specific issues of IAS 7 Statement of Cash Flows
Other areas noted
- The financial reporting consequences of Argentina being classified as a hyperinflationary economy under IFRS as of 1 July 2018
- The disclosures of non-financial information with particular focus on: environmental and climate change-related matters, explaining where certain policies are not followed; and key-performance indicators relating to non-financial policies
- Specific aspects of the ESMA Guidelines on Alternative Performance Measures (APMs), namely the definition and explanation of APMs and the principle of prominence.