The CSSF has published Press Release 17/43 (the “Press Release”) for the attention of issuers of securities subject to the Law of January 11th 2008 on transparency requirements for issuers of securities, as amended. The CSSF wishes to highlight to those issuers and auditors preparing and auditing, respectively, the International Financial Reporting Standards (hereafter referred to as “IFRS”) financial statements for the year ending December 31st 2017, a number of points that shall be subject of specific monitoring by the CSSF during 2018. The European Securities and Markets Authority (the “ESMA”), together with the European national accounting enforcers, including the CSSF, have identified common enforcement priorities for the 2017 financial statements. Having assessed these common priorities, the CSSF declares in the Press Release, that its enforcement campaign will focus on the following:
- Disclosure of the expected impact of implementation of major new IFRS standards in the period of their initial application.
The CSSF will monitor that the disclosures under new IFRS standards (in particular IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers, applicable as of January 1st 2018 and IFRS 16 Leases which becomes applicable as of January 1st 2019, with early application allowed) in the period of their initial application, are done with adequate qualitative and quantitative data.
- Specific measurement and disclosure issues stemming from IFRS 3 Business Combinations.
Having already focused on the key aspects of accounting for a business combination under IFRS 3 in 2017, the CSSF will continue to monitor the compliance with a number of significantaspects of IFRS 3, including but not limited to judgements and estimates made by management and the most meaningful disclosures.
- Specific issues of IAS 7 Statement of Cash Flows.
The CSSF will closely examine the extent to which the additional presentation requirements under the amended IAS 7 are respected.
- Fair value measurement and disclosure requirements provided for by IFRS 13.
The CSSF will continue to monitor that the requirements of IFRS 13 are well incorporated in the 2017 annual financial statements, and will take appropriate enforcement actions whenever material misstatements are identified.
- Actions from the post-implementation of IFRS 8 Operating Segments.
The CSSF will scrutinise the implementation of IFRS 8 with particular regard to the issues identified in the Exposure Draft on Improvements to IFRS 8 released by the International Accounting Standards Board in March 2017.
- Disclosure of non-financial and diversity information in the management report.
In light of the additional disclosure requirements under the Luxembourg Law of July 23rd 2016 on disclosure of non-financial and diversity information for certain large undertakings and groups, implementing Directive 2014/95/EU, the CSSF will pay close attention to how issuers provide information which is relevant and useful to users of financial statements, when purporting to comply with those additional disclosure requirements.