ESMA has announced enforcement priorities for 2022 financial statements

On 28 October 2022, the European Securities and Markets Authority (ESMA) announced the priority issues that the assessment of listed companies' 2022 financial statements will focus on.

ESMA is an independent EU authority that was established in 2011. ESMA’s mission is to enhance the protection of investors and promote stable and well-functioning financial markets in the European Union.

The European national enforcers of financial information monitor and review financial statements published by issuers with securities traded on a regulated European market who prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) and consider whether they comply with IFRS and other applicable reporting requirements, including relevant national law.

The common enforcement priorities related to the 2022 IFRS financial statements reflect a special focus on Russia’s invasion of Ukraine and climate-related disclosures. The key areas are:

  • Climate-related matters
  • Direct financial impacts of Russia’s invasion of Ukraine
  • Macroeconomic environment (resulting from a combination of remaining pandemic-related effects, inflation, increase in the interest rates, deterioration of the business climate, geopolitical risks and uncertainties regarding future developments)

The common enforcement priorities related to the 2022 non-financial statements year-end are:

  • Climate-related matters
  • Taxonomy-related disclosures
  • Reporting scope and data quality

Additionally, ESMA reminds issuers that, starting from the financial year 2020, annual financial reports shall be prepared in compliance with the European Single Electronic Format (ESEF) and starting from the financial year 2022, disclosures included in IFRS consolidated financial statements shall be marked up, as a minimum, with the elements contained in Annex II of the RTS on ESEF. More information is available on the ESMA special website to help issuers understand the requirements.

ESMA and European national enforcers will monitor and supervise the application of the IFRS requirements outlined in the priorities, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. ESMA will collect data on how European listed entities have applied the priorities and will publish its findings in a separate report.

A public statement on the enforcement priorities for 2022 is available here.

ESMA Financial Statements IFRS

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