ESMA enforcement priorities published – geopolitical risks and uncertainties continue to challenge listed companies’ IFRS reporting

The European common enforcement priorities (ECEP) published by the European Securities and Markets Authority (ESMA) in October concern listed companies’ 2025 IFRS financial statements, sustainability reporting and ESEF reporting.

The public statement on priorities is divided into three sections. The IFRS-related priorities presented in Section 1 are:

  1. Geopolitical risks and uncertainties
  2. Segment reporting (IFRS 8)

Item 1 focuses on, among other things, impairment of non-financial assets, changes in revenue recognition and the recoverability of deferred tax assets. Item 2 addresses, among other things, operating segment identification and aggregation criteria, disclosure of revenues and expenses for reportable segments, and information about geographical areas. 

Section 2 addresses reporting of sustainability information. The enforcement priorities are:

  1. Materiality considerations in reporting under ESRS
  2. Scope and structure of the sustainability report

This year, ESMA has also conducted a review of the materiality definitions of the first reports under the ESRS Materiality matters . There is more on this topic in article 1 in this Market Newsletter.

Section 3 presents a priority related to ESEF reporting, focusing on common errors found in the statement of cash flows.

The final section presents general consideration and reminders, for example in relation to IFRS 18 Presentation and Disclosure in Financial Statements, which must be applied from 1 January 2027. ESMA urges companies to assess carefully the impact of IFRS 18 on financial statements, use of performance measures and reporting systems. ESMA will publish a statement on the implementation of IFRS 18 in early 2026. In addition, ESMA would like to remind companies about, among other things, the consistency of financial statement information and sustainability report information and the consistency of alternative performance indicators from year to year.

For further information, please contact:

  • Nina Lindeman, Senior Specialist, nina.lindeman(at)finanssivalvonta.fi, tel. +358 9 183 5325.