Adrian Johnson
TLDR:
- IASB proposes eight new illustrative examples to guide companies in reporting climate-related uncertainties in financial statements.
- Examples cover materiality judgements, disclosures about assumptions, and disaggregation of information.
Article:
The International Accounting Standards Board (IASB) has addressed investor concerns about climate risk disclosure by proposing eight new illustrative examples to guide companies in reporting climate-related uncertainties in their financial statements. These examples aim to improve transparency and strengthen the connection between financial statements and sustainability disclosures. The IASB collaborated with the International Sustainability Standards Board (ISSB) and its technical staff in developing these examples to ensure alignment with sustainability-related disclosure requirements.
The proposed examples cover materiality judgements, disclosures about assumptions related to climate risks, and the disaggregation of information based on climate-related risk characteristics. The IASB emphasizes that these examples do not add to or change the requirements in IFRS Accounting Standards but provide guidance on applying existing requirements to offer investors better information about climate-related risks and other uncertainties.
The comment period for feedback on the proposed examples is open until 28 November 2024. This initiative by the IASB comes at a time when investors and regulators are pressuring companies for improved climate risk reporting. With the complexities of quantifying and disclosing climate-related risks, these examples could offer valuable guidance for companies, leading to more comprehensive and comparable disclosures across different industries and jurisdictions.
