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IFAC sees continued opportunity to harmonise Corporate Sustainability Reporting The International Federation of Accountants welcomes the publication of the much anticipated draft text of the European Union’s revised Corporate Sustainability Reporting Directive. This ambitious proposal demonstrates leadership on the issue of corporate reporting. The legislation seeks to put sustainability related reporting on the same footing as traditional financial reporting. This is long overdue. Specific proposals, such as where sustainability information is reported, mandatory assurance, a digital reporting taxonomy and expanded scope for oversight by audit committees, are all important
elements of enhancing the corporate reporting ecosystem to include sustainability related information. As progress on the IFRS Foundation’s Sustainability Standards Board accelerates, IFAC believes that policy makers have a unique opportunity to build a truly global system for sustainability reporting. It hopes that the EU’s important work ultimately contributes to – and amplifies the impact of – the emerging global system. IFAC CEO Kevin Dancey said: “It is great to see a commitment to the needs of investors, as well as other stakeholders, and to co-operation and alignment with international
initiatives, including proposed work of the IFRS Foundation as well as the efforts of various public authorities. “IFAC urges the IFRS Foundation to move with speed so that the benefits of baseline standards for enterprise value reporting will be available to all jurisdictions, while preserving the flexibility for disclosures that meet local needs addressing wider sustainability development goals. “These are truly exciting times. We will continue to engage with the various stakeholders in this space as we all work toward the shared goal of a global system for reporting sustainability related information in the public interest.”
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with a focus on enterprise value creation, a unique connection to the work of the IASB, and backing from IOSCO and other authorities. This approach offers the quickest and most effective route to a baseline of internationally consistent sustainability related disclosures for enterprise value creation developed in the public interest. IFAC calls for international collaboration and cooperation to make this initiative a success.”
IASB proposes amendments setting out accounting for when no foreign exchange rate exists
IFAC continues to advocate for convergence in Global Sustainability Standards The International Federation of Accountants continues its work to support the establishment of global sustainability standards in the public interest. In this regard, IFAC endorses the most recent actions announced by the IFRS Foundation Trustees and IOSCO. Specifically, IFAC supports the IFRS Foundation’s formation of a working group and efforts to set up a multi-stakeholder expert consultative committee, both of which will accelerate progress towards a successful standards setting board. These steps demonstrate the IFRS Foundation’s focus on delivering with speed by leveraging and bringing together the work of existing initiatives. IFAC further supports IOSCO’s establishment of a new Technical Expert Group under its Sustainable Finance Task Force, which demonstrates growing international demand for the work of the IFRS Foundation. IFAC CEO Kevin Dancey said: “IFAC reiterates its support for the IFRS Foundation to establish an international standard setting board AIAWORLDWIDE.COM | ISSUE 117
IASB proposes changes to the IFRS Taxonomy 2021 for Disclosure of Accounting Policies and Definition of Accounting Estimates The International Accounting Standards Board has published a proposed update to the IFRS Taxonomy 2021 for the following amendments to IFRS Standards: ● Disclosure of Accounting Policies, which amended IAS 1 and IFRS Practice Statement 2; and ● Definition of Accounting Estimates, which amended IAS 8. The proposed IFRS Taxonomy Update includes changes to the IFRS Taxonomy elements to reflect the new and amended disclosure requirements introduced by the amendments, issued by the Board in February 2021.
The International Accounting Standards Board has published for public consultation proposed amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates. The proposed amendments aim to help companies determine whether a currency can be exchanged into another currency, and what accounting to apply if the currency cannot be exchanged. IAS 21 sets out the exchange rate a company uses when it reports foreign currency transactions or a foreign operation’s results in a different currency. However, the standard does not set out the exchange rate to use when there is no observable exchange rate the company can use – such as when a currency cannot be converted into a foreign currency. The Board’s proposed amendments to IAS 21 would help companies to identify if this situation applies to them and the accounting to apply when it does. The proposed amendments would improve the usefulness of the information provided to investors by requiring a consistent approach to determining whether a currency is exchangeable into another currency; and, when it is not, determining the exchange rate to use and the disclosures to provide.
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