The Cyprus Securities and Exchange Commission (CySEC) has issued a circular notifying issuers of securities which are listed for trading on the Cyprus Stock Exchange or any other regulated market of its priority issues for financial statements and annual reports for 2017. CySEC's priority issues are identical to those set out in the latest Public Statement on European Common Enforcement Priorities published by the European Securities and Markets Authority (Esma). The Public Statement sets out the priorities jointly agreed by national supervisory authorities of the countries of the European Economic Area in relation to financial statements for the year 2017 regarding the implementation of international financial reporting standards (IFRS), with the objective of achieving consistency in the application of the IFRS in Europe.
The common European priorities for 2017 adopted by CySEC are as follows:
- disclosure of the expected impact of the implementation of major new standards in the period of their initial application, particularly IFRS 9 – Financial Instruments, IFRS 15 – Income from Contracts with Customers, and IFRS 16 – Leases.
- recognition, measurement and disclosure of specific matters in relation to IFRS 3 – Business and Business Combinations.
- issues arising from International Accounting Standard 7 – Statements of Cash Flow.
- In addition, supervisory authorities will continue to monitor issues identified as priorities in earlier years, including presentation of financial performance and disclosure of any effects on the business of the British decision to leave the EU.
The CySEC circular also draws attention to recent changes to the Companies Law to implement Directive 2014/95/EU, which introduced new disclosure requirements for large businesses and groups regarding non-financial information and information on diversity. The new requirements apply for the financial year 2017 and later years.
CySEC recommends that issuers with securities admitted to trading on a regulated market and their auditors take due account of the issues and recommendations contained in the Esma Public Statement when compiling financial statements and annual reports for 2017, since CySEC will take the priorities into account in its assessments of these documents and will take appropriate action where deemed necessary.