ESMA publishes a report on the activities of accounting enforcers and their findings within the EU in 2021

On 31 March 2022, the European Securities and Markets Authority (ESMA) published a report on the enforcement and regulatory activities of accounting enforcers within the European Union in 2021.

ESMA is an independent EU authority that was established on 1 January 2011. ESMA’s mission is to enhance the protection of investors and promote stable and well-functioning financial markets in the European Union (EU).

ESMA and the accounting enforcers in the EU regularly examine the compliance of financial information provided by listed issuers on regulated markets with the applicable financial reporting framework (IFRS).

At the end of 2021, approximately 4 200 issuers preparing IFRS financial statements were admitted to trading on a regulated market in the EU, of which around 3 500 prepared IFRS consolidated financial statements and around 700 prepared only IFRS non-consolidated financial statements. In the Czech Republic there were 72 issuers in 2021 of which 27 prepared IFRS consolidated financial statements and 45 issuers prepared IFRS non-consolidated financial statements.

In 2021, the European enforcers examined the financial statements of about 711 issuers representing an average examination rate of 17% of all IFRS issuers with securities listed on regulated markets. These examinations resulted in 250 actions taken to address material departures from IFRS which represents an action rate of 40%. The main deficiencies were identified in the areas of accounting for financial instruments, impairment of non-financial assets, presentation of financial statements and revenue recognition. Around 30% of the actions taken during 2021 related to issues regarding recognition and / or measurement, while 70% of the actions related only to disclosure issues.

In 2021, ESMA and European enforcers evaluated the level of compliance with IFRS in the areas identified as common enforcement priorities for 2020 annual IFRS financial statements on a sample of 166 IFRS financial statements examined by European enforcers. This assessment reflected the need to provide adequate transparency regarding the consequences of the COVID-19 pandemic and related to:

  • the application of IAS 1 Presentation of Financial Statements with a focus on going concern, significant judgements and estimation uncertainty and the presentation of COVID-related items in the financial statements;
  • the application of IAS 36 Impairment of Assets;
  • the application of IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures;
  • specific issues related to the application of IFRS 16 Leases, including explicit disclosures by lessees which have applied the Amendment to IFRS 16 providing relief to lessees when accounting for rent concessions.

ESMA Report on En­force­ment and Reg­u­la­tory Ac­tiv­i­ties of Accounting Enforcers in 2021 is available on the ESMA website.


ESMA IFRS dReport newsletter

Upcoming events

Seminars, webcasts, business breakfasts and other events organized by Deloitte.

    Show morearrow-right