IASB Publishes Proposed Guidance to Help Companies Report on Climate Risk

The International Accounting Standards Board (IASB), the accounting standards-setting body of the IFRS Foundation, announced the publication of a consultation document, with a series of new proposed illustrative examples aimed at enabling companies to provide investors with better information about climate-related risks and other uncertainties. The IASB provides illustrative examples as non-mandatory guidance accompanying IFRS Accounting Standards, with the purpose of illustrating how the requirements in the Standards apply to particular fact patterns.

According to the IASB, the new examples were developed in response to stakeholder demand, particularly from investors, who expressed concern about climate-related information provided in financial statements that was insufficient or appeared inconsistent with information reported outside of financial statements. The eight proposed examples focus on areas including materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information, aimed at improving transparency and strengthening the connection between financial statements and other parts of company reporting, such as sustainability disclosures, the IASB said.

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