May 20, 2020
Published: European Securities and Markets Authority
ESMA is issuing this Statement in order to promote transparency and consistent application of European requirements for the information provided in the half-yearly financial reports under the current circumstances related to the COVID-19 outbreak.
ESMA acknowledges that the COVID-19 outbreak has posed significant challenges to business activities and introduced a high degree of uncertainty on the expected development of the pandemic and the associated knock-on effects on the economic and financial system, both at European and at international level. In this context, ESMA has consistently highlighted the need to continue providing the necessary level of transparency in financial communication, while considering measures that could provide assistance to issuers in facing these difficult circumstances.
In particular, this Statement addresses the preparation of the interim financial statements according to IFRS and the interim management reports for the 2020 half-yearly reporting periods. It highlights the need for issuers to provide updated information that is useful to investors to adequately reflect the current and expected impact of the COVID-19 situation on the financial position, performance and cash-flows of issuers. ESMA also highlights the importance of providing information on the identification of the principal risks and uncertainties to which issuers are exposed. The considerations in this statement are also applicable to the reporting of financial information in other interim periods to which IAS 34 Interim Financial Reporting is applied.
ESMA calls on the management, administrative and supervisory bodies, including audit committees, of issuers and, where applicable, their auditors, in light of their different responsibilities in the process for the preparation of periodic financial information, to take due consideration of the recommendations included in this Statement when preparing the interim financial reports in order to ensure that they provide comparable, relevant and reliable information and an adequate level of disclosure and transparency to market participants. Given the complexities of the current environment, ESMA encourages audit committees to enhance their oversight role which is key to contribute to high-quality half-yearly financial reports.
· Timing of publication of half-yearly financial reports 2020
· Half-yearly financial statements
– Application of IAS 34
– Disclosures reflecting significant uncertainties, going concern and risks linked to COVID-19
– Impairment of non-financial assets
– Presentation of COVID-19 related items in the statement of profit or loss
– Other disclosure requirements applicable to half-yearly financial statements
· Interim management reports