28 May 2024
The European Securities and Markets Authority (ESMA) has published the 29th Extract from its database of enforcement decisions taken by EU accounting enforcers.
The objective of the publication is to provide issuers and users of financial statements with relevant information on the appropriate application of the International Financial Reporting Standards (IFRS).
This 29th Extract comprises eight decisions taken by European enforcers between December 2021 and December 2023. The decisions cover a number of topics:
1. Decisions on International Financial Reporting Standards
1.1 Significant influence – IAS 28 Investments in Associates and Joint Ventures
1.2 Related party transactions – IAS 24 Related Party Disclosures
1.3 Disclosures of fair value – IFRS 13 Fair Value Measurement
1.4 Disclosures in the interim financial report – IAS 34 Interim Financial Reporting and IAS 36 Impairment of Assets
1.5 Measurement of expected credit losses – IFRS 9 Financial Instruments
2. Decisions on ESMA Guidelines on Alternative Performance Measures (APMs)
2.1 Scope of the APM Guidelines
2.2 Calculation of return on capital employed (ROCE)
2.3 Definition of an APM
This 29th Extract may be accessed here.
EU accounting enforcers, including IAASA, examine the 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 ESMA’s Financial Reporting Working Group (FRWG) (formerly: EECS), a forum in which European accounting enforcers meet to share the reasons underpinning their accounting enforcement decisions. IAASA is an active member of the FRWG 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 different applications in practice. Matters arising from these discussions may be 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 European 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:
- 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,
- the decision deals with a simple accounting issue that, even having been considered a material infringement, does not in itself have any accounting merit,
- there is no consensus within the FRWG to support the submitted decision, or
- 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 FRWG decisions database on a regular basis.