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IFRS – Will Your Company Be Required to Report?
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Are you hearing the increased buzz about new rules, regulations, standards, and accounting directives designed to expand corporate sustainability reporting focused on ESG topics and issues? Will your company be required to report? Are you ready to report?
Highlights
In June 2023, the International Sustainability Standards Board (ISSB) released the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. The Standards are IFRS S1: General Requirements of Sustainability-related Financial Information and IFRS S2: Climate-related Disclosures. The purpose of IFRS S1 and S2 is to provide global criteria for sustainability reporting, inform investors, and facilitate disclosure of comprehensive sustainability-related information for global capital markets.
Background
There are two important and broadly similar financial accounting and reporting global regimens – GAAP (Generally Accepted Accounting Principles) and IFRS. GAAP is the system used for decades by publicly-traded companies in the United States. IFRS is used by…well, the rest of the world.
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When stock markets in the U.S. crashed in October 1929, most of the investors were not receiving periodic information about the condition of companies they invested in. Historic laws passed by the U.S. Congress in 1933 and 1934 addressed financial disclosure and new Federal agencies such as the Securities & Exchange Commission set out to “reform” accounting and financial reporting by U.S. public companies. Soon, GAAP began to take shape and over the next decades evolved into the backbone for corporate financial reporting and for players in the capital markets where securities trade. The system was enshrined in law by the U.S. Congress in 1972 with creation of the Financial Accounting Standards Board to oversee GAAP.
Elsewhere another system was taking shape – IFRS was created in 2001 and overseen by the not-for profit IFAS (International Financial Accounting System). At least 168 nations/jurisdictions other than the U.S. use IFRS for public company accounting and reporting (from Albania to Zimbabwe). Over the years there have been earnest efforts to better align the two systems (GAAP being rules-based and IFRS being principles-based, to over-simplify).
More recently, the IFRS has taken the leadership in moving toward global standards in sustainability reporting by announcing the formation in 2021 of ISSB to develop a comprehensive global baseline of sustainability disclosures for global financial markets. These are the IFRS Sustainability Disclosure Standards that are being adopted in policies by an increasing number of countries around the world.
The G&A Institute team members are experts in the new reporting standards. To help U.S. corporate managers prepare for compliance, we’ve prepared a new G&A Resource Paper, available for your download. G&A Institute will conduct an informative webinar on IFRS reporting requirements: IFRS’ ISSB Reporting Standards Pathfinders Webinar.
As you tune in to IFRS reporting requirements, consider the G&A Institute team your guide to structure and navigate your company’s IFRS sustainability reporting. Email us at info@ga-institute.com.
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Sustainability Standard Setters & Policy Makers
SEC, SASB, GRI, IIRC, FSB-TCFD
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ESG / Sustainable & Responsible Investment
Asset Owners & Managers, Ratings Agencies
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Corporate Sustainability / ESG
Disclosure, Reporting, Corporate Initiatives
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Stakeholders That Matter
Developments, Trends, Corporate Actions Affecting Stakeholders
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Global Sustainability News: Forward Momentum!
News & Developments of Note
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Sustainability Data in Focus
Developments in Data, Research, Trends
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U.S. Climate Actions
Updates from and about Washington D.C.
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Eyes on Europe
ESG Regulations
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These feeds are provided for G&A Institute in partnership with 3BL. 3BL distributes press releases, blogs, videos, podcasts, reports, newsletters and more to the growing audience of stakeholders interested in Corporate Social Responsibility (CSR) and Sustainability. Visit 3BL.com for more.
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