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ESMA publishes compendium of enforcement decisions taken by EU accounting enforcers


The European Securities and Markets Authority (ESMA) has published the 26th Extract from its database of enforcement decisions taken by EU accounting enforcers.


This 26th Extract, which includes a decision taken by IAASA, comprises eleven decisions taken by European enforcers between March 2020 and November 2021. The decisions cover a number of topics including:


  • measurement of expected credit losses
  • measurement of net realisable value of inventory
  • recognition of revenue over time
  • impairment test of cash generating unit comprising right of use assets
  • COVID-19 impairment indicators
  • identification of cash generating units
  • composition of cash and cash equivalents


The Extract of enforcement decisions aims to provide issuers and users of financial statements with relevant information on the appropriate application of the International Financial Reporting Standards (IFRS).


This 26th Extract may be accessed here.


EU accounting enforcers, including IAASA, examine the annual and half-yearly financial statements of issuers and consider whether or not they comply with IFRS and other applicable reporting requirements, including relevant national law. These accounting enforcers participate in the European Enforcer Coordination Sessions (EECS), a forum in which all EU/EEA accounting enforcers meet to share the reasons underpinning their accounting enforcement decisions. IAASA is an active member of the EECS and in this forum accounting enforcers also canvas other members’ views on issues currently being dealt with and identify issues which do not appear to be covered by financial reporting standards or which may be affected by conflicting interpretations. Matters arising from these discussions are often referred to standard setting or interpretive bodies such as the International Accounting Standards Board (IASB) or the International Financial Reporting Standards Interpretations Committee (IFRS IC).


ESMA has developed a confidential database of enforcement decisions taken by individual EU accounting enforcers as a source of information to foster appropriate and consistent application of IFRS. All decisions submitted to the database are considered as appropriate for publication, unless:


  1. similar decisions have already been published by ESMA, and publication of a new decision would not add any substantial value to the fostering of consistent application;


  1. the decision deals with a simple accounting issue that, even having been considered a material infringement, does not in itself have any accounting merit;


  1. there is no consensus within the EECS to support the submitted decision; or


  1. a particular EU accounting enforcer, on a grounded and justified basis, believes that the decision should not be published.


ESMA will continue to publish extracts from the EECS database on a regular basis.


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