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ARTICLE · 05 JULY 2018

ESMA Report: Recurring Issues In IFRS Statements

KPMG Luxembourg
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In April, ESMA published its findings on the European Common Enforcement Priorities 2016[1] (read more about ESMA's 2017 activity report in this article).

LuxembourgCorporate/Commercial Law
Georgina Prokop
Georgina Prokop
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In April, ESMA published its findings on the European Common Enforcement Priorities 20161 (read more about ESMA's 2017 activity report in this article).

In terms of scope, ESMA examined the financial statements of 170 issuers of varying sectors and levels of market capitalisation. Around 25% of them were from the industrial sector, and 13% from the financial sector.

In this article, we will look at what recurring issues ESMA found.

Presentation of financial performance and financial position

In the financial statements, ESMA found many variations on how subtotals were labelled (operating results, operating income, adjusted operating income to name a few), which is not surprising since IAS 1 doesn't provide guidance on this. This discrepancy unfortunately hinders the comparability of figures, leading ESMA to support the IASB's project to improve and standardise financial statement presentation.

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