ESMA recognises the human cost of Russia’s military aggression against Ukraine, and the significant challenges to business activities and effects on the global economic and financial system posed by the invasion. The statement, with the aim of promoting investor protection, provides overarching messages to issuers and auditors including:
  • A reminder of the main IFRS requirements which may be applicable in the context of Russia’s invasion of Ukraine e.g., impairment of non-financial and financial assets, and loss of control;
  • ESMA’s expectations regarding disclosures in financial statements e.g., judgements made, significant uncertainties, and going concern risks;
  • ESMA’s expectations regarding disclosures in interim management reports e.g., direct and indirect impact of Russia’s invasion of Ukraine and imposed sanctions on issuers’ strategic orientation and targets, operations, financial performance, financial position and cash-flows, measures taken to mitigate the impacts, and cybersecurity risks; and
  • A reminder of issuers’ obligations vis-à-vis the Market Abuse Regulation.

ESMA has issued a Public Statement on the Transparency on implementation of IFRS 17 Insurance Contracts.

The Statement highlights the importance of issuers accompanying users of their financial statements, so that they understand the expected accounting implications of the new Standard’s application.

ESMA’s recommendations cover the disclosures of expected impacts of the initial application of IFRS 17 in the interim and annual financial statements for 2022. ESMA expects management and supervisory boards members and auditors to take into account these recommendations, when fulfilling their respective obligations relating to the issuer’s interim and annual financial statements 2022.

In line with past major standards (IFRS 9 and IFRS 15), in the year prior to their effective date ESMA provides a roadmap to help issuers in providing the disclosures on expected impacts of new, but not yet effective, standards, as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

The final draft RTS also specify a minimum set of common standards with regards to information to be considered in credit risk assessment and loan valuation and the underlying policies and governance arrangements.

Investors using crowdfunding platforms may be exposed to the risk of having insufficient information, and/or incomplete understanding of the viability of a crowdfunding project or of the due diligence conducted by the crowdfunding service providers.
Therefore, it is important that adequate information is disclosed to investors on how credit scores are calculated, and crowdfunding offers are priced. Moreover, investors need to be sure that crowdfunding service providers are subject to a minimum set of common standards in terms of credit risk assessment, governance, and risk management structures.
Against this backdrop, these final draft RTS specify the information that crowdfunding service providers shall disclose with respect to the method used to calculate credit scores assigned to crowdfunding projects and prices of crowdfunding offers, and how to ensure that loan pricing is indeed fair and appropriate. The final draft RTS also specify the information to be considered when conducting the creditworthiness assessment of project owners and crowdfunding projects.
Finally, the final draft RTS propose what policies and procedures crowdfunding service providers are required to have in place to ensure that investors are adequately informed, and that credit risk assessment and loan valuation are conducted in a sound and consistent manner.