ESMA has published a statement detailing the common enforcement priorities for financial statements produced in respect of the calendar year ending 31 December 2013. These enforcement priorities refer to the following specific aspects of the International Financial Reporting Standards (IFRS):
- Impairment of non-financial assets, with a focus on cash–flow projections, key assumptions and sensitivity analysis
- Measurement and disclosure of post–employment benefit obligations. ESMA expects relevant entities to maintain their approach to determining the discount rates for their post–employment benefit obligations in their 31 December 2013 IFRS financial statements
- Fair value measurement and disclosure. Issuers should assess the impact of any change to their fair value measurement practice based on the requirements of IFRS 13 – Fair Value Measurement, defining fair value, clarifying and refining the principles for its determination as well as setting out its measurement framework
- Disclosures related to significant accounting policies, judgments and estimates. ESMA expects issuers to focus on the quality and completeness of disclosures that are relevant to an entity’s financial statements
- Measurement of financial instruments and disclosure of related risks, particularly relevant for financial institutions
ESMA, together with European national competent authorities, will monitor and assess the application of IFRS requirements relating to the items listed above. These common enforcement priorities will be incorporated into the reviews performed by national competent authorities who will take corrective actions whenever material misstatements are identified. In addition, ESMA will report on findings regarding the common enforcement priorities in its 2014 Report on enforcement activities.