Technical update

Accountancy profession

The International Federation of Accountants (IFAC) has released a global framework of six principles to create healthy and sustainable professional environments within the accounting profession. Known as Thriving Together: 6 Principles for a Resilient Accountancy Profession, the practical framework looks to accountancy firms, leaders and individuals to support fulfilling careers, embed sustainable ways of working, promote balance through healthy boundaries and prioritisation, build transparency and trust, ensure all leadership levels set and model a positive culture, and empower staff. ‘The principles reflect growing recognition across the profession that wellbeing and professional capability are complementary,’ says IFAC.

Sustainability

The European Commission has adopted the revised and streamlined European Sustainability Reporting Standards (ESRS) and the Voluntary Sustainability Reporting Standard. EFRAG (the European Financial Reporting Advisory Group) says the voluntary standard supports ‘proportionate and practical sustainability reporting for undertakings with fewer than 1,000 employees’.

EFRAG has also released a draft XBRL taxonomy of the revised ESRS for comments ahead of its planned submission to the European Securities and Markets Authority (ESMA) and the European Commission by the end of 2026. The taxonomy gives the technical basis for delivering ESRS disclosures in a digital machine-readable format.

The Global Reporting Initiative (GRI) is developing shorter and more focused sustainability reporting standards for specific sectors in a streamlined format. An initial pilot project for this series – for food and beverages – is underway, with the GRI seeking 20 members to join an international multistakeholder peer review group.

The GRI Community membership programme has been split into two GRI Networks. The GRI Business Network is for reporting companies and in-house sustainability teams, while the GRI Expert Network is for sustainability reporting consultants, advisory firms and assurance providers.

Accounting standards

The International Accounting Standards Board (IASB) is reviewing whether its hedge accounting requirements are delivering benefits for investors and other financial statement users. The relevant portion of hedge accounting requirements in IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures, will be assessed, with comments sought from investors, companies, auditors, regulators, standard-setters and other experts.

The IASB has also concluded technical discussions on its equity method project, helping to revise IAS 28, Investments in Associates and Joint Ventures, to reduce diversity in how the equity method is applied. The new IAS 28 will be released in the first half of 2027, and will improve understandability of the fair-value exemption option.

The board has also released an accounting standard update for IFRS for SMEs, highlighting changes in the requirements for agriculture, including how to measure the value of ‘bearer plants’ such as olive trees, which can be harvested annually.

Ethics

The International Ethics Standards Board for Accountants (IESBA) has released practical guidance to support the implementation of the International Ethics Standards for Sustainability Assurance (IESSA). The advice addresses effective date and transitional provisions, the rotation of engagement leaders and other key sustainability assurance leaders, and non-assurance services (including those provided before accepting a sustainability assurance engagement).

AI

The International Auditing and Assurance Standards Board (IAASB) is developing guidance on applying its quality management standards to AI-enabled technological tools, with the text likely to be approved by November. The board is also developing frequently asked questions for its ISSA 5000 sustainability assurance standard.

Tax

The EU’s Council of Ministers has removed Panama and Vietnam from the EU list of non-cooperative jurisdictions for tax purposes, which highlights countries failing to comply with agreed international tax standards or undertake tax good governance. It says that Panama has ‘reformed its harmful foreign-source income exemption regime’ and that Vietnam has embarked on tax law reforms. Listing can lead to the imposition of withholding taxes and denial of tax deductibility for commercial costs associated with these countries.

Public sector

The International Public Sector Accounting Standards Board (IPSASB) has received a 2026 International Standards of Accounting and Reporting (ISAR) Honours award from the UN trade and development agency for developing IPSASB SRS 1, Climate-related Disclosures – the first global sustainability reporting standard for the public sector.