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ESMA publishes common enforcement priorities for 2013 financial statements
Monday, 11th November, 2013: The European Securities and Markets Authority (‘ESMA’) has published a statement, the purpose of which is to define the common enforcement priorities for 2013 financial statements in order to promote consistent application of International Financial Reporting Standards (‘IFRS’). ESMA’s statement can be accessed here.
Common enforcement priorities for 2013 financial statements refer to the application of IFRS in relation to:
▪ Impairment of non-financial assets;
▪ Measurement and disclosure of post-employment benefit obligations;
▪ Fair value measurement and disclosure;
▪ Disclosures related to significant accounting policies, judgments and estimates; and
▪ Measurement of financial instruments and disclosure of related risks.
ESMA’s common enforcement priorities for 2013 financial statements are consistent with the key topics set out in IAASA’s annual Observations document published in October 2013.
ESMA publishes the 14th extract from its database of enforcement decisions
Tuesday, 29th October, 2013: The European Securities and Markets Authority (ESMA) has published the 14th extract from its database of enforcement decisions taken by EU national supervisors of financial reporting that participate in the European Enforcer Coordination Sessions (EECS). EU national supervisors monitor and review the financial statements of issuers and consider whether they comply with International Financial Reporting Standards (IFRS) and other applicable reporting requirements, including relevant national law. This extract can be accessed here.
The EECS is a forum in which all EU/EEA national supervisors of financial information meet to share the reasons underpinning their accounting enforcement decisions, canvas members’ views on issues currently being dealt with and to identify issues which do not appear to be covered by financial reporting standards or which may be affected by conflicting interpretations for referral 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 national supervisors as a source of information to foster appropriate 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
- there is no consensus within the EECS to support the
- a particular EU National enforcer, on a grounded and
justified basis, believes that the decision should not be published.
Extracts do not usually include the name of the issuer or the enforcer or any other details that would enable the issuer or its jurisdiction to be identified.
IAASA is a member of the EECS and the Authority’s Head of Financial Reporting Supervision is also a member of the EECS’ Agenda Group.
IAASA publishes observations on selected accounting issues for 2013 financial statements
Tuesday, 22nd October 2013: IAASA, Ireland’s accounting enforcer, has published its annual Observations document which highlights some key topics that should be considered by those preparing, approving and auditing 2013 financial statements. During 2014, IAASA will examine how companies implement recommendations that are set out in this Observations document. IAASA’s remit extends only to Irish companies trading on regulated markets. However, this Observations document should be of interest to a wider range of companies when preparing their 2013 year end financial statements.
Key topics covered in IAASA’s 2013 Observations document include:
(a) impairment testing: the value assigned to many assets recognised in financial statements is dependent on their underlying cash flow forecasts . The Observations document lists six areas that IAASA has focused on during its recent examinations and that preparers and directors should pay particular attention to when preparing their cash flow forecasts;
(b) forbearance measures: the risk disclosures of banks in relation to forbearance measures provided to customers, should not be aggregated within other non-forborne loan disclosures in financial statements. The Observations document lists six disclosures that should, at a minimum, be provided in this regard;
(c) deferred tax assets: where a company has recognised deferred tax assets on its balance sheet arising from a history of recent losses, IAASA expects future taxable profits forecasts to be underpinned by key supportable assumption(s) that are realistic, reflect the company’s circumstances and constitute convincing evidence of future taxable profits;
(d) provisions: companies are reminded of the level of detail to be provided on classes of provisions and the need to provide certain minimum disclosures in instance where greater disclosure would be seriously prejudicial to the company (e.g. litigation);
(e) pension liabilities: The Observations document contains findings based on a desk top review on how changes in the discount rate used to value pension liabilities is measured and disclosed by selected companies. IAASA will continue to monitor the extent of companies’ compliance with the measurement and disclosure requirements of the relevant accounting standard and
(f) alternative performance measures: companies are reminded of IAASA’s November 2012 publication on the use of alternative performance measures by companies. IAASA is disappointed to note that several issuers have not made improvements in this regard and this will be a focus of examination activity in 2014.
The Observations document also highlights areas where the quality of disclosure in annual financial statements needs to be carefully considered by preparers and directors including the format of the Income Statement, key management personnel disclosures, and the use of boilerplate disclosures where the disclosures are not tailored to the specific circumstances of the company.
The Observations document can be accessed here:
IAASA has in previous years issued similar Observations documents and these may be accessed here.
IAASA makes senior appointment
Monday, 21st October, 2013: IAASA is pleased to announce the appointment of Ms Eileen Townsend as Head of Regulatory & Monitoring Supervision. Ms Townsend, who is a qualified accountant, has been employed as a Project Manager with IAASA since 2006. She previously worked as a lecturer in accounting and auditing in Dublin City University and as an assistant audit manager with PwC.