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Jul 27, 2023

IFRS on ISSB proposal and new accounting standards

ISSB and IASB will be released in the first half of 2024

The International Sustainability Standards Board (ISSB) has issued a proposal which reflects the disclosure requirements for the global standards IFRS S1 and IFRS S2.

The proposed IFRS Sustainability Disclosure Taxonomy is designed to help users better understand how to produce sustainability-related financial information digitally. ISSB says it’s requesting feedback on the proposals over a 60-day consultation period which closes on September 26, 2023.

‘Investors increasingly consume information digitally, therefore it's important that we facilitate digital consumption of sustainability-related financial information,’ Emmanuel Faber, chair of the ISSB, says.

‘Our proposed digital taxonomy is designed to make it easier for investors to extract, compare and analyze the information companies provide.’

ISSB will review feedback on the proposals in the second half of 2023 with the aim to issue the final digital taxonomy in early 2024. ISSB sets general requirements for disclosure and climate-related disclosures for businesses around the globe.

Boost consistency and transparency

IFRS also provides an update on the International Accounting Standards Board (IASB) which is reportedly in the final stages before drafting and balloting two new standards expected in 2024.

The first of these standards looks to boost the information companies provide about their financial performance while the other standard aims to simplify the financial statements prepared by subsidiaries of listed groups.

One of the standards will also result in companies reporting their financial performance ‘more consistently and transparently’ while making it easier for investors to compare companies.

Meanwhile, the second standard will aim to reduce disclosure requirements for subsidiaries which are not traded on a public market, or hold assets entrusted to them by their customers.

IASB says it will require companies to start reporting on or after January 1, 2027 to give companies enough time to implement the new requirements.