ESMA & BaFin: Enforcement priorities for 2024 corporate reporting

 

 

ESMA also formulates general considerations and guidance on other relevant topics which are no key priorities but general remarks. These include, in particular, the connectivity between financial and sustainability statements.

On November 7, 2024, the German Federal Financial Supervisory Authority (BaFin) also published its enforcement priorities for consolidated financial statements 2024. As part of its sample audits, BaFin will focus on the recoverability of recognized assets within the scope of the international accounting standards IAS 36 and IFRS 9. Both non-financial and financial assets are to be tested for impairment. The focus is justified by the judgements and significant estimates in this area as well as current geopolitical and macroeconomic challenges. BaFin expects companies to provide appropriate documentation of the analyses and tests as well as transparent and comprehensible documentation of the underlying assumptions.

BaFin emphasises that companies must carefully examine non-financial assets to determine whether there are internal or external indications of possible impairment. These reviews should not only include intangible assets with an indefinite useful life such as goodwill, but also property, plant and equipment and other intangible assets. In the case of financial assets, the focus is on the recoverability of receivables.

 

In addition, BaFin also considers the enforcement priorities published by ESMA in its sample audits for the 2024 financial year, focusing on liquidity aspects and disclosures in the notes on accounting policies, judgements and significant estimates.