Enforcement des rapports annuels 2021 publiés par les émetteurs soumis à la Loi Transparence (uniquement en anglais)

Pursuant to the Law of 11 January 2008 on Transparency requirements for issuers (the “Transparency Law”), the CSSF is monitoring that financial and non-financial information published by issuers is drawn up in compliance with the applicable reporting frameworks.

As issuers are now preparing their reporting for the 2021 financial year, the CSSF wishes to draw the attention of those issuers preparing their financial statements in accordance with IFRS and/or their non-financial report in accordance with the Law of 23 July 2016 , as well as of their auditors, to a number of topics and issues that will be the subject of a specific monitoring during the CSSF’s enforcement campaign planned for 2022.

1. European Common Enforcement Priorities

As in previous years, the European Securities and Markets Authority (“ESMA”), together with the European national accounting enforcers, including the CSSF, identified European common enforcement priorities (the “ECEPs”) for the 2021 annual reports to which particular attention will be paid when monitoring and assessing the application of the relevant reporting requirements. ESMA issued on 29 October 2021 a public statement which presents these 2021 ECEPs. This document is available on the CSSF website under Enforcement of financial information.

The 2021 ECEPs related to IFRS financial statements focus on the following topics:

  • Impacts of COVID-19 pandemic:
    • Longer-term impact;
    • Recovery from COVID-19; and
    • Government support measures.
  • Climate-related matters in the financial statements:
    • Consistency between IFRS financial statements and Non-Financial information;
    • Climate risks in IFRS Standards;
    • Significant judgements and estimation uncertainty; and
    • Defining materiality.
  • Expected credit losses (ECL) disclosures of credit institutions:
    • Management overlays;
    • Significant changes in credit risk (stage transfers);
    • Forward-looking information;
    • Transparency on changes in loss allowances, credit risk exposures and collateral; and
    • Effect of climate-related risk on the ECL measurement.

In its communication, ESMA also sets priorities in relation to non-financial statements for the 2021 year-end:

  • Impacts of COVID-19;
  • Climate-related matters; and
  • Disclosures relating to Article 8 of the Taxonomy Regulation.

Finally, ESMA addresses other considerations in relation to alternative performance measures (APMs).

2. Other points of attention identified by the CSSF

When establishing its enforcement campaign, the CSSF assessed how to monitor these ECEPs and considered the need to identify further items of interest. The underlying analysis is based on the following criteria:

  • the importance and relevance of these topics for issuers under the CSSF’s direct supervision;
  • the experience and history of issues encountered by the CSSF during previous campaigns; and
  • the importance of judgments and assumptions to be made by issuers in dealing with these topics.

As a result, the CSSF’s 2022 enforcement campaign will not only cover the ECEPs but will also focus on the following topics:

a. Classification and measurement requirements under IFRS 9

In conjunction with the current post-implementation review of the classification and measurement requirements in IFRS 9 Financial instruments, the CSSF will pay close attention to disclosures of accounting policies for financial instruments, and particularly to those requiring significant judgement. For example, issuers are expected to disclose how they have considered the frequency and significance of sales in determining the business model for managing their financial assets. In the very rare cases where a reclassification of financial assets occurs after initial recognition, the CSSF reminds issuers that such changes are determined by the issuer’s senior management, as a result of external or internal changes, and must be significant to the entity’s operations and demonstrable to external parties.

Moreover, the CSSF will carefully review the “Solely Payment of Principal and Interest” assessment for loans or bonds with interest rates linked to sustainability targets, instruments which tend to develop rapidly.

b. Interest Rate Benchmark Reform

The introduction of Regulation 2016/10111 triggered an interest rate benchmark reform (“BMR”) on major financial benchmarks impacting a significant range of financial instruments and financial contracts, with the main potential effect on hedge accounting given the extensive use of interest rate benchmarks in global financial markets.

The IASB consequently prepared an Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7, IFRS 4 and IFRS 16) with the aim to provide relief to the expected impact of the BMR. This project was split in two phases.

Phase 1, published in September 2019, is related to the hedging relationships which are directly affected by the BMR. Accordingly, hedge accounting requirements must be applied as if the benchmark interest rate, on which the hedged cash flows and cash flows from the hedging instrument are based, were not changed by the BMR. Consequently, the amendments to IFRS 9 and IAS 39 ensure that hedge accounting is not required to be discontinued.

Phase 2 has been published by the IASB on 27 August 2020 and addresses transition and post-replacement issues broader than hedge accounting such as modifications of financial assets and liabilities. As such, the amendments require an entity to account for a change in the basis for determining contractual cash flows of a financial asset or a financial liability that is required by the BMR by updating the effective interest rate of the financial asset or financial liability. Furthermore, the amendments also require an entity to disclose additional information about the entity’s exposure to risks arising from the BMR and related risk management activities.

During its 2022 enforcement campaign, the CSSF will continue to monitor the impact of the BMR on issuers’ financial statements.

c. Presentation of Primary financial statements

The IASB is currently working on proposals to set out new requirements for presentation and disclosure in financial statements, in response to investors’ concerns about comparability and transparency of companies’ performance reporting.

The proposals especially concern the statement of profit or loss, introducing new subtotals and disaggregation principles. They also address issues relating to options for the presentation of the statement of cash flows and the requirements for reporting management performance measures.

Although discussions are still ongoing, the CSSF wishes to draw attention to these possible future requirements necessary to improve the financial information for the users of the financial statements.

In this context and in the light of the tentative decisions of the IASB already available as part of the project “Primary financial statements”, the CSSF encourages issuers to undertake a comprehensive review of their presentation of the statement of profit or loss and notably challenge the subtotals presented.

Besides, the CSSF intends to perform a thematic review on the presentation of the statement of profit or loss in light of the IASB proposals.

3. Entry into force of new requirements

a. European Single Electronic Format (ESEF)

The CSSF reminds issuers that, as from financial year 2021, they shall prepare their annual financial statements (AFRs) in compliance with ESEF.

Therefore, issuers should publish their AFRs in XHTML, a human readable standard which can be opened with any standard web browser. Where AFRs include IFRS consolidated financial statements, issuers shall mark-up those consolidated financial statements using XBRL tags, which make the labelled disclosures structured and machine-readable.

If needed, issuers can consult the dedicated page on ESMA’s website for guidance material.

b. Taxonomy Regulation

The CSSF wants to highlight that issuers need to be prepared for the new disclosure obligations under Article 8 of the Taxonomy Regulation that will apply as from 1 January 2022.

Issuers can refer to the CSSF communiqué issued on 29 November 2021 for more details on these obligations.


More information on inspections and findings by the CSSF within the framework of its mission under Article 22 (2) h) of the Transparency Law are given under Enforcement of financial information.

1 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014.