ESMA statement on the accounting implications of the COVID-19 economic support and relief measures

25 March 2020

The European Securities and Markets Authority (ESMA) has issued a public statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak. The measures include moratoria on repayment of loans and have an impact on the calculation of expected credit losses in accordance with IFRS 9.

ESMA has issued the statement in order to promote consistent application of IFRSs in the EU and avoid divergence in practice on the application of IFRS 9 Financial Instruments in the specific context of the COVID-19 outbreak, specifically as regards the calculation of expected credit losses and related disclosure requirements. In ESMA’s view, the principles-based nature of IFRS 9 includes sufficient flexibility to faithfully reflect the specific circumstances of the COVID-19 outbreak and the associated public policy measures.

Please click to access the statement on the ESMA website.

The European Banking Authority (EBA) has also issued a related statement regarding the prudential framework and accounting implications of COVID-19. The two statements are consistent as regards financial reporting. The statement can be accessed on the EBA website.