On 20 May 2020, ESMA issued a public statement to address the implications of the COVID-19 outbreak on the half-year financial reports, which must be prepared and published by issuers (the “Statement”). In the Statement, ESMA highlights the importance of issuers

including in their reports up-to-date information that adequately reflects the current and expected impact of the COVID-19 situation on their financial position, performance and cash-flows and calls on the management, administrative and supervisory bodies of issuers (including the audit committee), as well as auditors, to take due consideration of the guidance included in the Statement.

On timing, ESMA acknowledges that issuers may consider delaying the publication of their half-year reports within the applicable time limits (subject to compliance with market abuse legislation) but reminds issuers that publication should not be unduly delayed to the detriment of providing timely, reliable and relevant information to the market.

The Statement first focuses on the application of IAS 23; ESMA expects there to be extensive information included in reports on new activities, events and circumstances that have not been captured in the most recent annual financial statements, given the COVID-19 related events which have transpired in the first half of 2020. ESMA also flags that for many issuers, COVID-19 is a significant event and as such, additional disclosures will likely be required. ESMA highlights that some of the disclosures that are normally required by IFRS for a complete set of (annual) financial statements may be used to provide relevant information on the consequences arising from the COVID-19 outbreak in the condensed financial statements for the half-year.

The Statement elaborates on the necessary disclosures regarding significant uncertainties, going concern and risks linked to COVID-19, noting that for many issuers, there is doubt as to their ability to continue as a going concern. If this is the case, the relevant entities must disclose those uncertainties.

ESMA calls on issuers to carefully consider and disclose the impairment of non-financial assets as a consequence of the COVID-19 outbreak. As to presentation of COVID-19 related items in the profit and loss statements, ESMA appeals for caution. In particular, ESMA points out that separate presentation of the impacts may be misleading. Issuers are asked to provide information, on a quantitative basis, on the impacts of the COVID-19 outbreak as part of the explanations/notes to the accounts.

In a more general manner, ESMA calls on issuers to consider whether there are any other IFRS requirements that might be relevant in the context of the half-year financial reporting.

ESMA also gives some specific recommendations to issuers on the content of their interim management reports in light of the COVID-19 outbreak.

Finally, issuers are reminded of the new Q&A on the ESMA Guidelines on Alternative Performance Measures in the context of COVID-19.