Sustainability
The International Sustainability Standards Board (ISSB) is considering a report highlighting difficulties in implementing its first two standards with board members to assess whether they need amending. The paper focuses especially on problems linked to IFRS S2 on climate-related disclosures, such as concluding paragraphs that are ‘unclear and appear contradictory’ to the requirements for the disclosure of Scope 3 category 15 greenhouse gas emissions. Another paper discusses the benefits and problems that could result from amending the standards multiple times to fix problems, including ‘potential disruption to ongoing implementation and adoption’.
More than 1,000 companies have now referenced in their reporting the IFRS Sustainability Disclosure Standards produced by the ISSB, and 30 jurisdictions are integrating those standards in laws or regulations, according to the standard-setter. A comprehensive progress report from the ISSB lists Brazil, Canada, China, India, Japan, Singapore and the UK as among the 30 jurisdictions, which together account for around 57% of global GDP, more than 40% of global market capitalisation, and over half of global greenhouse gas emissions. The report also revealed that, in the 2023 fiscal year, 82% of public companies reported in line with at least one of the 11 recommended disclosures of the Task Force on Climate‑related Financial Disclosures, 44% in line with at least five, and 2%–3% in line with all 11.
A memorandum of understanding has been signed between CDP (the Carbon Disclosure Project) and GRI (the Global Reporting Initiative), committing both organisations to building capacity and streamlining disclosure for companies. They will develop technical alignment, including a mapping exercise to enhance interoperability, assessing CDP’s questionnaire and GRI topic standards for climate change, water and biodiversity.
Assurance
The International Organization of Securities Commissions (IOSCO) has welcomed the finalisation of a draft international standard on sustainability assurance (ISSA) 5000 by the International Auditing and Assurance Standards Board (IAASB), which is now being assessed ahead of formal adoption, probably by January 2025. IOSCO has also backed the IFRS Sustainability Disclosure Standards as global baselines in sustainability reporting, noting that the IAASB initiative ‘can contribute to enhancing trust in the sustainability-related information provided to investors’.
Public sector
The International Public Sector Accounting Standards Board (IPSASB) has released a draft sustainability reporting standard for government for public comment. The IPSASB SRS exposure draft proposes public sector-specific guidance, building on the ISSB’s global baseline. IPSASB says its standard proposes ‘principles for the more limited group of public sector entities that have responsibility for climate-related public policy programmes and their outcomes’.
IPSASB has also released a draft reporting standard on assessing tangible natural resources – ie all naturally occurring substances that can generate future economic benefits. Until now, IPSASB has not advised on accounting for tangible natural resources, so governments may lack information on their extent and value.
New guidance on reporting concessionary leases and other arrangements conveying rights over assets has also been released by IPSASB, amending IPSAS 43, IPSAS 47 and IPSAS 48. The changes cover leases charged at below-market terms and other arrangements conveying rights over assets, and are designed to boost transparency.
Provisions
The International Accounting Standards Board (IASB) is consulting on proposed amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets, clarifying how companies assess, measure and record provisions. The IASB wants more transparent and comparable information to assess future cashflows and financial positions. This would likely to be most relevant for companies with large long-term asset decommissioning obligations or paying government-imposed charges.
Intangible assets
The IASB has asked investors, companies, accountants and others to take part in a survey on whether its accounting requirements for reporting intangibles in company financial statements need amending through changes to IAS 38, Intangible Assets.
More information
ACCA’s annual virtual conference, Accounting for the Future, features sessions on technical and regulatory issues including reporting on biodiversity and ecosystem risks and opportunities, ethical challenges for accounting professionals, and an update from the IASB on its future workplan.
