The European Securities and Markets Authority (ESMA) has published its annual Public Statement on European Common Enforcement Priorities (Priorities) for 2015.

The document identifies the key focus areas – according to ESMA and European regulators – for financial statements submitted by listed companies in 2015.

These common enforcement priorities focus on recurring issues identified in the application of IFRS requirements. They also focus on the current interest rate environment, foreign exchange rates and country risks, all of which result from the current economic volatility.

In particular, the common enforcement priorities include the following topics:

1. Impact of financial markets conditions on financial statements; ESMA urges listed companies and their auditors to pay particular attention to the current interest rate environment, country risk in relation to where their business is located and exposure to foreign exchange rates and high volatility for commodities.
2. Statement of cash flows and related disclosures: issuers should ensure the statement and disclosures are consistent with the other primary financial statements.
3. Fair value measurement and related disclosures: ESMA considers there is substantial room to improve measurement and disclosure related to non-financial assets and liabilities in particular.

According to ESMA Chair Steven Maijoor, “The common enforcement priorities play an important role in achieving a high level of harmonisation in the enforcement and application of IFRS across the EU. The current financial market conditions are expected to impact financial information and ESMA urges listed companies and auditors to pay particular attention to ensure that these impacts are correctly reflected in financial statements and investors are duly informed.”

ESMA and European national enforcers will monitor and supervise the application of the IFRS requirements outlined in the Priorities, with national authorities incorporating them into their reviews and taking corrective actions where appropriate. ESMA will collect data on how European listed entities have applied the Priorities and will publish its findings in early 2017.