Must Read: ESMA’s Maijoor on IFRS
Yesterday, at the EFRAG Conference in Brussels, Steven Maijoor, Chair of the European Securities and Markets Authority, gave an enormously significant speech highlighting how uniform IFRS standards have benefited Europe. The speech underlined the importance of IFRS going forward and described the expected impact of structured (ESEF) data in Inline XBRL for users and regulators alike. He also urged policy makers to focus on standardisation in relation to ESG disclosures.
This is a must-read for anyone concerned with capital markets evolution, with IFRS and with digitisation of reporting. Maijoor’s speech reference Europe but his prescriptions are relevant globally.
He points out that the availability of the single IFRS Taxonomy has been crucial for the move to electronic reporting across Europe. ESEF will amplify the benefits of IFRS harmonisation, while preserving flexibility through extensions. It will open up new opportunities for users, investors and enforcers thanks to the improved usability of financial data. Analysis and comparison will be faster, and ESEF will further facilitate the use of artificial intelligence.
While electronic reporting projects us into the digital age, another key question of our time is what role IFRS and reporting can play in sustainability. Maijoor highlights the need to consider business operations as complex and intricate, with non-financial information not as separate from financial information as once thought. He points out that “At the same time, we have to acknowledge that [financial] information – although it remains important – only tells part of the story. It is therefore necessary to bring non-financial information to a level of maturity that is comparable to that of IFRS information and achieve more transparency on non-financial information to complement […] financial statements.”
In fact, Maijoor argues for “binding measures that specify requirements for the preparation of non-financial disclosures.” Something that we at XBRL International whole heartedly support.
Quick! Read the speech here.