ESMA & BaFin: Enforcement priorities for 2024 corporate reporting

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​​​published on 28 November 2024 | Reading time approx. 2 minutes

 

​​​​​​​​​​​​​​​​​​​On October 24, 2024, the European Securities and Markets Authority (ESMA) issued its annual Public Statement setting out the European common enforcement priorities for 2024 corporate reporting​. These are particularly relevant for capital market-oriented companies and their supervisory boards as well as their auditors when preparing and auditing the 2024 IFRS financial statements.

The enforcement priorities are divided into the following topics:


1. IFRS financial statements

  • Liquidity considerations
  • Accounting policies, judgements and significant estimates
 

2. Sustainability statements

  • ​​Materiality considerations in reporting under European Sustainability Reporting Standards (ESRS)
  • Scope and structure of the sustainability statement
  • Disclosures relating to Article 8 of the EU Taxonomy Regulation
 

3. ESEF reporting

  • Common errors found in the Statement of Financial Position


ESMA also formulates general considerations and guidance on other relevant topics which are no key priorities but general remarks. These include, in particular, the connectivity between financial and sustainability statements.

On November 7, 2024, the German Federal Financial Supervisory Authority (BaFin) also published its enforcement priorities for consolidated financial statements 2024. As part of its sample audits, BaFin will focus on the recoverability of recognized assets within the scope of the international accounting standards IAS 36 and IFRS 9. Both non-financial and financial assets are to be tested for impairment. The focus is justified by the judgements and significant estimates in this area as well as current geopolitical and macroeconomic challenges. BaFin expects companies to provide appropriate documentation of the analyses and tests as well as transparent and comprehensible documentation of the underlying assumptions.

BaFin emphasises that companies must carefully examine non-financial assets to determine whether there are internal or external indications of possible impairment. These reviews should not only include intangible assets with an indefinite useful life such as goodwill, but also property, plant and equipment and other intangible assets. In the case of financial assets, the focus is on the recoverability of receivables.
 
In addition, BaFin also considers the enforcement priorities published by ESMA in its sample audits for the 2024 financial year, focusing on liquidity aspects and disclosures in the notes on accounting policies, judgements and significant estimates.
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