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Get ready for the world’s financial revolution – it’s happening!

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Key Points:

  • The International Accounting Standards Board (IASB) is expected to launch or finish a few key standards in 2024.
  • The board will finalize changes to the income statement, improve climate risk disclosures, and address the measurement of intangible assets.

The International Accounting Standards Board (IASB) is set to resume standard-setting after a hiatus of six years. The board will focus on updating some decades-old rules to better fit the financial value concerns of today’s companies. Some of the key projects that the IASB will undertake in 2024 include finalizing changes to the income statement, improving climate risk disclosures, and addressing the measurement of intangible assets.

The update to the income statement will replace the board’s first-ever accounting standard, IAS 1 Presentation of Financial Statements, which was issued in 1975. This update aims to introduce new sub-totals to the income statement, such as operating profit, and require companies to disclose any non-GAAP measures they use and reconcile them back to the formal financial statements.

The IASB is also planning to address the measurement of intangible assets, such as branding and intellectual property. The current standard covering intangibles, IAS 38, was written for manufacturing companies and does not adequately account for companies like Google. The board will study intangibles reporting and gather feedback from investors to determine the need for a new accounting standard or for amendments to existing rules.

In addition, the IASB will focus on improving climate risk disclosures in financial reporting. Currently, companies are required to report any material risks related to climate change in their financial statements, but few companies do so. The board will research how to enhance climate risk disclosures and broaden its scope to include other environmental, social, and governance risks.

This update from the IASB is significant as it addresses key issues in financial reporting, including the income statement, intangible asset measurement, and climate risk disclosures. These updates aim to provide more accurate and relevant information to investors and enhance the transparency and comparability of financial statements.

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