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IASB: ED with 8 Illustrative examples to improve reporting of Climate-related and Other Uncertainties in FS
- 20 August 2024
- Financial Reporting
- South African Accounting Academy
The IASB developed these illustrative examples1 in response to strong demand from stakeholders, particularly from investors. They expressed concerns that information about climate-related uncertainties in financial statements was sometimes insufficient or appeared to be inconsistent with information provided outside the financial statements. To respond to these concerns, the IASB’s proposed examples aim to:
- improve transparency of information in financial statements; and
- strengthen the connection between financial statements and other parts of a company’s reporting, such as sustainability disclosures.
The 8 illustrative examples focus on areas such as materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information. The principles and requirements illustrated in these examples apply equally to other types of uncertainties2 beyond climate-related uncertainties.
These illustrative examples are one of several actions that the IASB is undertaking to help improve the reporting of climate-related and other uncertainties in financial statements.
The IASB invites all stakeholders to provide feedback on the proposed illustrative examples.
The comment period is open until 28 November 2024.
Click here to download the 38-page Exposure Draft:
Relevance to Auditors, Independent Reviewers & Accountants:
- As an auditor and independent reviewer, you need to consider your clients’ compliance with accounting standards.
- Auditors, Independent Reviewers and Accountants should be aware of the latest publications and guidance issued by regulators and standard-setting boards, such as the IASB – especially those relating to sustainability reporting.
- As an accountant and compiler of financial statements, you need to consider amendments and proposed amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.
Relevance to Your Clients:
- An entity compiling filing financials need to consider amendments and proposed amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.
- Entities should demonstrate awareness of sustainability and the effects on financial reporting.