IASB’s new guidance will enhance reporting on climate risk for companies.

TLDR:

Key Points:

• IASB publishes proposed illustrative examples to help companies report on climate-related risks.
• New examples aim to improve transparency and strengthen the connection between financial statements and sustainability disclosures.

The International Accounting Standards Board (IASB) has released a consultation document containing new proposed illustrative examples to assist companies in providing investors with better information about climate-related risks and uncertainties. This non-mandatory guidance aims to address stakeholder concerns, particularly from investors, regarding the adequacy and consistency of climate-related information in financial statements. The eight proposed examples focus on areas such as materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information to enhance transparency and communication in financial reporting.

These new examples are part of the IASB’s ongoing efforts to help companies report on climate issues, complementing previous initiatives by the organization. Andreas Barckow, Chair of the IASB, emphasizes the importance of clarity in financial statements to reflect how climate-related risks impact a company’s financial position and performance, responding to investor demands for such information. The proposed examples seek to provide this clarity and improve the application of existing Accounting Standards to address climate-related risks more effectively.