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ESMA publishes 16th extract from its database of enforcement decisions

Tuesday 18th November, 2014: The European Securities and Markets Authority (ESMA) has published the 16th 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.

EECS is a forum in which all EU/EEA national supervisors of financial information meet to share the reasons underpinning their accounting enforcement decisions. National supervisors canvas members’ views on issues currently being dealt with and may 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 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 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 provide significant information or learning from an accounting perspective;

• there is no consensus within EECS to support the submitted decision; or

• a particular EU national enforcer, on a grounded and justified basis, believes that the decision should not be published.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 EECS and the Authority’s Head of Financial Reporting Supervision represents IAASA at EECS and is also a member of the EECS’ Agenda Group.


FRC publishes FRED 56 (‘Draft FRS 104 Interim Financial Reporting’) November 2014

Wednesday, 12th November, 2014: The UK Financial Reporting Council (“FRC”), has today issued an Exposure Draft, FRED 56 Draft FRS 104 Interim Financial Reporting

FRED 56 sets out a draft accounting standard which is intended to replace the Statement Half-yearly financial reports) issued by the Accounting Standards Board (ASB) in 2007.

It is intended that FRS 104 will be the pronouncement on interim reporting that Irish issuers not using EU-adopted IFRS will apply as set out in the Transparency (Directive 2004/109/EC) Regulations 2007.

Irish issuers’ half yearly reports for interim periods beginning on or after 1 January 2015 will be the first ones prepared under new Irish/UK GAAP and, therefore, IAASA strongly encourages issuers to consider its application at the earliest opportunity.

Comments on the proposals are invited by 12 January 2015. The FRC intends to finalise the new interim reporting requirements by the end of the first quarter of 2015.

Pursuant to its statutory mandate to cooperate in the development of accounting standards, IAASA has observer status at meetings of the Accounting Council of the FRC and has been involved in its development.

FRED 56 Draft FRS 104 Interim Financial Reporting can be accessed below:

FRED 56 Draft FRS 104 Interim Financial Reporting


ESMA issues statement on common enforcement priorities

Tuesday, 28th October, 2014:  The European Securities and Markets Authority (‘ESMA’) has published a statement, the purpose of which is to define the common enforcement priorities for 2014 financial statements in order to promote consistent application of International Financial Reporting Standards (‘IFRS’).  ESMA’s statement can be accessed here.

The common enforcement priorities encompass the following topics:

1. Preparation and presentation of consolidated financial statements and related disclosures;

2. Financial reporting by entities which have joint arrangements and related disclosures; and

3. Recognition and measurement of deferred tax assets and uncertain tax positions.

ESMA’s common enforcement priorities for 2014 financial statements are consistent with the key topics set out in IAASA’s annual Observations document published last week.  In particular, IAASA is pleased to note the inclusion of the items on uncertain tax positions and the recognition and measurement of deferred tax which are a result of issues raised by IAASA with its European counterparts during the year.


IAASA publishes observations on selected accounting issues for 2014 financial statements

Thursday, 23rd October, 2014: IAASA, Ireland’s accounting enforcer, has published its annual Observations document highlighting key topics to be considered by those preparing, approving and auditing 2014 financial statements.

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 2014 year end financial statements.

Key topics covered by this Observations document include the following:

a) Measurement of recoverable amounts on cash generating units: Areas requiring careful examination are the determination of value in use calculations and the disclosure of recoverable amounts of cash generating units containing goodwill or intangible assets with indefinite useful lives. Close attention is needed in determining the disclosures to be provided by each significant cash generating unit rather than for all such units in aggregate.

b) Recognition, measurement and disclosures surrounding deferred tax assets: The judgements made regarding the assessment of the probability of future taxable profits being available against which unused tax losses may be recovered and the period of recovery warrant very close scrutiny.

c) Accounting for uncertain tax positions: The measurement and disclosure of uncertain tax positions require close attention in preparing 2014 financial statements.

d) Assessing control under IFRS 10 Consolidated Financial Statements: IFRS provides a single consolidation model that identifies control as the basis for consolidation. The IFRS 10 principle of control is more broadly defined than that applied under earlier financial reporting standards. Companies should carefully consider their judgements in assessing whether control exists under the IFRS 10 definition.

e) Alternative performance measures: IAASA will continue to engage with issuers in order to seek improvements in the use, presentation and disclosures surrounding alternative performance measures.

f) Messages for financial institutions: There are specific messages for financial institutions regarding the accounting aspects of the ECB/EBA Asset Quality Review, impairment provisioning and the level of disclosures in relation to forbearance measures granted to residential mortgage holders.

The Observations document can be accessed here.

IAASA has in previous years issued similar Observations documents and these may be accessed here.


Contact Information

Irish Auditing & Accounting
Supervisory Authority
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Phone: +353 (0) 45 983 600
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