A limited European Union review of compliance with accounting rules regarding business combinations in financial statements raised several red flags, the European Securities and Markets Authority (ESMA) revealed this week.
ESMA reviewed the 2012 annual International Financial Reporting Standards (IFRS) financial statements of 56 listed entities in 11 European countries, and looked at how consistent the issuers were in applying key requirements of the IFRS 3 rules on business combinations. There were 66 business combinations represented in the statements, worth a combined €76 billion. The regulator said while there were some good disclosures provided, there were several areas where it felt issuers fell short of the mark.
