Sustainability standards
The International Sustainability Standards Board (ISSB) has published the IFRS Sustainability Disclosure Taxonomy 2024, designed to help investors and other capital providers analyse sustainability-related financial disclosures. It enables companies to consistently tag information prepared using ISSB standards, and is consistent with the IFRS financial accounting taxonomy, to help create holistic finance reports integrating sustainability disclosures.
The IFRS Foundation and EFRAG (the European Financial Reporting Advisory Group) have published guidance on the alignment between ISSB standards and the European Sustainability Reporting Standards. The advice explains how companies can efficiently apply both sets of standards, including analysis of their alignment in climate-related disclosures.
Human capital
The ISSB is to research potential rules on disclosure about risks and opportunities associated with biodiversity, ecosystems and ecosystem services, and human capital. It will assess what information would help explain how these issues impact financial performance. The ISSB has dropped plans to research rules assessing the commercial impact of human rights issues.
Subsidiaries
The International Accounting Standards Board (IASB) has released a new standard, IFRS 19, Subsidiaries Without Public Accountability: Disclosures, designed to reduce accounting and bookkeeping requirements for subsidiaries. The standard allows subsidiaries lacking their own listed debt or equities to maintain books following national or IFRS SME standards, without having to also keep parallel records following full IFRS. The condition is that the subsidiaries’ parents keep full IFRS books. The IASB said that keeping twin books ‘may be disproportionate to the information needs of their users’.
Financial instruments
The IASB has released draft amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures, to help companies log how they are impacted by renewable electricity contracts. Such contracts’ reliance on nature means that supply cannot be guaranteed to meet demand, creating accounting challenges. So, changes allow hedge accounting when these contracts are used as hedging instruments. They also add disclosure requirements to enable investors to understand the financial effects of renewables contracts.
Intangibles
The IASB has launched a review of accounting requirements for intangibles, assessing whether IAS 38, Intangible Assets, remains relevant or needs change.
Public sector
The International Public Sector Accounting Standards Board (IPSASB) has issued Improvements to IPSAS, 2023 to align its standards with amendments to IFRS delivered by recent IASB narrow scope amendments. These include rules on financial statements and accounting for leases.
IPSASB has also released exposure draft (ED) 89, Amendments to Consider IFRIC Interpretations, for public comment, proposing changes to IPSAS based on five IFRIC (IFRS Interpretations Committee) interpretations. It includes changing estimates of liabilities to dismantle, remove or restore property, plant and equipment. Also, the amendments would advise on accounting for obligations to pay costs to decommissioning funds, and the identification and reporting of hyperinflation.
SMEs
The Global Reporting Initiative has joined the Switzerland-based Alliance for Sustainable Enterprises, leading efforts to design a sustainability reporting framework for SMEs adopting a voluntary legal status for Swiss companies focused on sustainability.
Professional development
The International Federation of Accountants (IFAC) has unveiled proposed changes to its International Education Standards (IESs), to embed sustainability analysis, reporting and assurance within professional accountants’ training. Key proposals include working with experts and in multidisciplinary teams; introducing key sustainability reporting concepts, such as systems thinking, value chains and scenario analysis; and referencing relevant sustainability reporting and assurance standards.
The International Federation of Accountants (IFAC) has proposed changes to IES 6, Initial Professional Development – Assessment of Professional Competence, to integrate current good practice and clarify previously existing training requirements. This includes introducing new principles emphasising integrity, authenticity, equity and inclusion. ‘These changes will aid professional accountancy organisations, universities, and training programmes in evaluating candidates’ readiness for the professional accountant role,’ said IFAC.
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.
