IAASA, Ireland’s accounting enforcer, has today published its annual Observations paper highlighting some significant topics that those charged with governance should consider when preparing their financial statements for 2019.
IAASA’s paper highlights some key areas that warrant close scrutiny by those preparing, approving and auditing 2019 financial statements in the upcoming reporting season including:
· the impact of new accounting standards – governing revenue measurement and recognition, lease financing and bad debt provisioning;
· identification and disclosure of the significant judgements made in preparing financial statements and the sources of estimation uncertainty inherent in those financial statements;
· the presentation of key performance indicators (KPIs) or alternative performance measures (APMs); and
· disclosures of the maturity analysis (or ageing profile) of financial liabilities which can indicate the risk that a company will have difficulties in paying its financial liabilities.
This 2019 Observations paper is addressed primarily to the preparers, approvers and auditors of financial statements. However, IAASA believes that it will also be helpful to users of financial statements and assist them in understanding the significant judgements made by companies in preparing their financial statements. The paper seeks to highlight matters users may wish to be aware of and focus on when reviewing 2019 financial statements.
While IAASA’s remit extends only to companies with securities admitted to trading on a regulated market (principally the Main Market of Euronext Dublin – the Irish Stock Exchange), the topics identified in the 2019 Observations paper could usefully be taken into consideration by a much wider range of companies with the aim of producing high quality financial reports more generally and increasing the transparency and usefulness of financial statements for users.
The 2019 Observations paper may be accessed here.
IAASA’s Observations papers from earlier years may be accessed here.