IFRS and EFRAG release interoperability guidance for companies
May 2, 2024
Also, the ISSB publishes sustainability taxonomy to support companies and investors.
New guidance from the IFRS Foundation and the European Financial Reporting Advisory Group (EFRAG) illustrates how companies can apply the International Sustainability Standards Board's (ISSB's) IFRS Sustainability Disclosure Standards and the European Sustainability Reporting Standards (ESRS), a news release said.
The publication looks at the high level of alignment achieved between both sets of standards and how companies can apply them, the release said, including detailed analysis of the alignment in climate-related disclosures.
"The document has been designed to reduce complexity, fragmentation, and duplication for companies applying both the ISSB standards and ESRS," the release said. "Today's publication now provides practical support that explains how companies can efficiently comply with both sets of standards."
According to the release, the guidance:
Describes the alignment of general requirements, including on key concepts such as materiality, presentation, and disclosures for sustainability topics other than climate; and
Provides information about the alignment of climate disclosures and what a company starting with either set of standards needs to know to enable compliance with both sets of standards.
"The ISSB's goal is to inform investor capital allocation decisions by ensuring they have access to globally comparable, targeted, and decision-useful disclosures," ISSB Chair Emmanuel Faber said in the release. "Thanks to our deep collaboration with EFRAG, companies can use our joint guidance as a module for providing the global baseline while also providing incremental disclosures required within the European Union."
Upcoming webinars look to improve understanding of new reporting requirements
To explain the changes and new requirements imposed by recent amendments to the accounting standards, the International Ethics Standards Board for Accountants (IESBA), the IASB, and the UK Financial Reporting Council (FRC) will launch a series of webinars for stakeholders this month.
IESBA will hold two interactive global webinars on 13 and 15 May to present the first global ethics standards on tax planning, released earlier this month, a news release said. It will feature a "high-level overview of the standards" and allow stakeholders to participate in a question-and-answer (Q&A) session with the presenters.
To help stakeholders gain a better understanding of the new requirements in IFRS 18, Presentation and Disclosure in Financial Statements, the IASB will launch three webinars starting from 16 May and concluding on 6 June, a news release said.
According to an FRC news release, its upcoming webinar scheduled for 15 May will review its recent revisions to FRS 102, The Financial Reporting Standards Applicable in the UK and Republic of Ireland, followed by a Q&A.
Interested parties can register for the sessions online. More information about the events is available in the news releases.
ISSB issues sustainability taxonomy to assist companies, investors
The ISSB published the IFRS Sustainability Disclosure Taxonomy 2024 (ISSB Taxonomy), encompassing standards IFRS S1 and S2, to help support dialogue between companies and investors.
The digital sustainability taxonomy aims to support investors and other capital providers tasked with analysing sustainability-related financial disclosures efficiently, a news release said. It reflects IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information, IFRS S2, Climate-Related Disclosures, and their accompanying guidance.
"Use of the ISSB Taxonomy by companies will enable investors to search, extract, and compare sustainability-related financial disclosures as [the] ISSB establishes its global baseline of standards," the release said.
The taxonomy "neither introduces new requirements nor affects a company's compliance" with the standards, the release said. It is designed so that companies can provide a holistic digital financial reporting package to investors, the release said. The taxonomy can also be used with other digital taxonomies.
IPSASB issues improvements to align with IFRS standard amendments
To align with amendments to IFRS accounting standards based on the IASB's Narrow Scope Amendments projects, the International Public Sector Accounting Standards Board (IPSASB) issued Improvements to IPSAS, 2023, a news release said.
The pronouncement was approved by the IPSASB in March.
The improvements deal with nonsubstantive changes to IPSAS through a collection of amendments that are unrelated, the publication said, and arise through consideration of the IASB's projects.
IFRS sets out focus areas for the year ahead
In its 2023 annual report, the IFRS Foundation laid out its priority areas for 2024. Those areas include:
Finalising decisions on key projects including the third edition of the IASB's IFRS for SMEs accounting standard and starting new projects on intangible assets and cash flow statements;
Supporting the implementation of IFRS Sustainability Disclosure Standards and finalising the ISSB's future work plan; and
Engaging with regulators and other authorities on the adoption of IFRS standards and with companies, investors, and other capital market stakeholders on their use of the standards.
"The Foundation remains committed to its mission of developing IFRS standards that bring transparency, accountability, and efficiency to the world's capital markets," a news release said.
[Financial Management Magazine]
