The European Securities and Markets Authority (ESMA), the European Union’s regulator and supervisor for financial markets, has released its annual European Common Enforcement Priorities (ECEP) Statement for corporate reporting in 2024.
For 2025, ESMA and European enforcers will focus on the following key areas:
- IFRS Financial Statements: Emphasizing liquidity considerations, accounting policies, judgements, and significant estimates.
- Sustainability Reports: Addressing materiality under the European Sustainability Reporting Standards (ESRS), as well as the scope and structure of sustainability statements, including disclosures related to Article 8 of the Taxonomy Regulation.
- ESEF Digital Reporting: Identifying common filing errors in the Statement of Financial Position.
The ECEP statement highlights the critical importance of integrating financial and non-financial information and references recent publications such as “From ‘Black Box’ to ‘Open Book’?”, “Clearing the Smog: Accounting for Carbon Allowances in Financial Statements”, and “Off to a Good Start: First Application of ESRS by Large Issuers and the ESEF Reporting Manual.”
The ECEP outlines the expectations of ESMA and National Competent Authorities (NCAs) regarding the enforcement and supervision of annual financial reports submitted by issuers whose securities are traded on regulated markets within the European Economic Area (EEA).
Issuers, auditors, and supervisory bodies are advised to consider the topics and detailed recommendations provided in this document when preparing, auditing, and supervising the 2024 annual financial reports, with particular attention to materiality and relevance for the issuer’s operations.
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