On November 10, 2016, the European Securities and Markets Authority issued a public Statement on the implementation of IFRS 9. The purpose of the Statement is to promote consistent application of European securities and markets legislation, and more specifically, International Financial Reporting Standards. ESMA notes that issuers of securities admitted to trading on regulated markets and their auditors should take the public statement into consideration during the implementation of IFRS 9; in particular, when disclosing and auditing its effects on such financial statements. ESMA is of the view that in most cases it would be appropriate to provide disclosures about changes in accounting policies and impacts on an entity's financial statements in the period of initial application already prior to the entity's 2017 annual financial reports. ESMA highlights that IFRS 9 is expected to have significant impacts on firms and, in particular, on credit institutions, due to the new classification for financial assets as well as implementation of the new impairment model based on the ECL. ESMA's Statement provides an illustrative timeline for implementation and a non-exhaustive list of good practices of disclosure when issuers (in general, and not limited to financial institutions) expect the application of IFRS 9 to have a significant impact on their financial statements. ESMA notes that each individual issuer should take into account materiality and its individual circumstances to ensure that relevant and transparent financial information is provided to users of its financial statements.
ESMA's Statement is available at: https://www.esma.europa.eu/sites/default/files/library/2016-1563_public_statementissues_on_implementation_of_ifrs_9.pdf.
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