Listed companies in the European Union should state the uncertainties they face due to the coronavirus pandemic in their half-yearly reports and explain why they can stay in business, the bloc’s securities watchdog said on Wednesday.

Axar.az reports the European Securities and Markets Authority (ESMA) said that to provide relevant and reliable information, companies may need to use of the extra time allowed by national law to publish half-year results.

“ESMA also highlights the importance of providing information on the identification of the principal risks and uncertainties to which issuers are exposed,” it said in a statement.

Financial firms should disclose the assumptions and judgments used to calculate how much they set aside in provisions to cover expected losses on loans, it said.

The half-yearly updates from companies should be particularly extensive because the events related to the COVID-19 outbreak have become evident in the first half of 2020.

Companies should also spell out conditions attached to any relief measures they have accepted from governments and regulators during the pandemic, it said.

“ESMA will collect data on how EU listed entities have applied the recommendations and will take into account those findings, amongst other considerations, in setting the enforcement priorities for the annual financial statements for the year 2020.”

Companies are already required to state why they believe they can stay in business for the coming 12 months as economies sink into deep recession with no recovery expected until 2021.