Sustainability
The International Accounting Standards Board (IASB) has released eight draft examples illustrating how companies should apply IFRS accounting standards when reporting climate-related uncertainties in their financial statements. The aim is to improve transparency of information in financial statements, and strengthen connections between financial statements and other reporting, such as sustainability disclosures. The examples focus on materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information. They could help guide reporting other non-climate related uncertainties.
The European Commission has published comprehensive frequently asked questions clarifying requirements within the European Union’s (EU) corporate sustainability reporting directive (CSRD). The goal is to explain how this law impacts the EU accounting directive (2013/34/EU), audit directive (2006/43/EC), audit regulation (EU No 537/2014) and transparency directive (2004/109/EC). It also clarifies provisions within the EU sustainable finance disclosures regulation (EU 2019/2088).
The European Financial Reporting Action Group (EFRAG) has warned in the first tranche of sustainability reporting under European Sustainability Reporting Standards (ESRS) by larger companies this year that many reporters have yet to integrate outcomes of a ‘double materiality assessment’ in gap analyses of data points. That could leave more data points in assessments than required under ESRS, risking ‘taking focus away from the relevant information that needs to be reported’.
International environmental disclosure organisation CDP has launched an SME questionnaire for small and medium-sized enterprises (SMEs), with fewer data points, simplified question formats and more guidance than its reporting model for larger companies.
The Global Reporting Initiative (GRI) and the Taskforce on Nature-related Financial Disclosures (TNFD) have published a joint interoperability mapping resource supplying a detailed overview of alignment between the TNFD disclosure recommendations and metrics and the GRI standards. That includes consistent nature-related concepts and definitions, and incorporation of GRI’s materiality approach in TNFD guidance.
Digital
The IFRS Foundation has published Using the IFRS digital taxonomies – A guide for regulators implementing the IFRS digital taxonomies in a digital filing system, aiding cross-border digital comparability and analysis of IFRS-compatible information.
Hyperinflation
The IASB has published planned changes to its standards helping accountants write financial reports that include currencies whose jurisdictions suffer from hyper-inflation. The planned changes to IAS21, The Effects of Changes in Foreign Exchange Rates would help translate financial information from a non-hyperinflationary to a hyperinflationary currency. The changes would deliver consistent and useful information in hyperinflationary currencies, boosting comparability, simplifying reporting and lowering accounting costs.
Subsidiaries
The IASB has proposed changes to its newest standard, IFRS19, Subsidiaries Without Public Accountability: Disclosures, to integrate streamlined disclosure requirements distilled from IFRS accounting standards and amendments issued between February 2021 and May 2024.
IFRS19 is designed to simplify financial reporting for eligible subsidiaries, incorporating reduced disclosure requirements from other IFRS accounting standards. These will be worked into IFRS as new standards are released, with this proposal adding recently approved accounting rules, such as amendments to IAS21, The Effects of Changes in Foreign Exchange Rates; changes to IAS1 on non-current liabilities with covenants; and more.
Internal audit
The Institute of Internal Auditors (IIA) has released its Internal Audit: Vision 2035 – Creating Our Future Together report where 97% of auditors surveyed expect technology to increase the complexity and volume of data available for analysis. Also, 93% said new technology will allow audit functions to develop better insights. However, less than half (48%) reported being involved in AI-related activities.
Public sector
The International Public Sector Accounting Standards Board (IPSASB) has released proposed amendments to IPSAS standards through the application of IPSAS46, Measurement, of assets and liabilities. This guidance affects existing IPSAS12, Inventories; IPSAS21, Impairment of Non-cash Generating Assets; IPSAS31, Intangible Assets; and IPSAS3, Accounting Policies, Changes in Accounting Estimates and Errors.
More information
Visit ACCA’s Accounting for a better world hub for articles and resources on sustainable business, and read ACCA’s guide to preparing for sustainability reporting.
