Today the European Securities and Markets Authority (‘ESMA’) published a statement titled European common enforcement priorities for 2017 IFRS financial statements which sets out those topics which company directors and auditors should particularly consider when preparing and auditing IFRS financial statements for the year ending 31 December 2017.
These topics will be used by European national accounting enforcers, including IAASA, in their examinations of companies’ 2017 financial statements.
The ESMA public statement is issued with the aim of promoting consistent application of International Financial Reporting Standards (‘IFRS’) by European companies in their financial reports.
ESMA and European national accounting enforcers worked together to identify those financial reporting topics which company directors and their auditors should particularly consider when preparing and auditing, respectively, the IFRS financial statements for the year ending 31 December 2017.
The ESMA common enforcement topics identified for 2016 financial statements are:
disclosure of the expected impact of implementation of major new standards in the period of their initial application (i.e. IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases);
specific recognition, measurement and disclosure issues of IFRS 3 Business Combinations; and
specific issues of IAS 7 Statement of Cash Flows.
Each of these topics is elaborated on in ESMA’s public statement which is available here.
In addition to these common priorities, many European national accounting enforcers also set additional enforcement priorities for their country focusing on other relevant topics. The IAASA document, Observations on selected financial reporting issues – Issuers’ financial years ending on or after 31 December 2017, which was published on 25 September 2017, is available here.