In the fourth quarter of 2025, evolving global, political, and macroeconomic uncertainties have continued to pose challenges for companies in developing and preparing estimates, assumptions and financial plans. These uncertainties are resulting in increased scrutiny and heightened expectations from regulators and investors for companies to provide clear disclosures in the financial statements. Regulators and investors expect these disclosures to not only explain how these uncertainties affect the company and its business, but also how the related judgements, estimates and assumptions are reflected in the financial statements. In addition, regulators and investors expect these disclosures to be continually updated.
Refer to our Import tariffs – what's the impact on your financial reporting? web page for key considerations and resources on the accounting and financial reporting impact of tariffs, and our Financial reporting in uncertain times resource centre which features a range of articles, blog posts and podcasts to explore the financial reporting impacts of operating in an uncertain environment, including our new Be clear in times of uncertainty guide. Also refer to our Connected reporting resource centre for insights and guidance on enhancing connectivity between the financial statements, MD&A, and sustainability-related financial disclosures.
From the standard setting front, the International Accounting Standards Board (IASB) made further progress on its long-term projects this quarter, including publishing the exposure draft for the risk mitigation accounting (RMA) model (previously referred to as dynamic risk management (DRM) model. The IFRS Interpretations Committee (IFRIC) also discussed several issues relating to the application and interpretation of IFRS 18 General Presentation and Disclosure, which is effective January 1, 2027. Companies in the middle of their IFRS 18 implementation efforts should be closely monitoring these discussions.
In the sustainability reporting space, the European Union (EU) agreed on changes to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), significantly reducing the number of companies required to report and progressed on its plans to simplify the European Sustainability Reporting Standards (ESRS).
Companies with a calendar year end will be required to apply the IFRS® Accounting Standards requirements effective from January 1, 2025 as outlined in section Requirements effective in 2025. Refer to our illustrative disclosures and disclosure checklist for our guides to financial statements that reflect Accounting Standards effective from January 1, 2025. Also refer to our IFRS Accounting Toolkit hub for resources to help you prepare your year end financial statements, including the Areas of focus for 2025 year ends podcast and Three key considerations for 2025 year-end reporting video.
Although not effective in 2025, companies should be aware of the new amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial Instruments and IFRS 9 – Power Purchase Agreements, which are effective January 1, 2026. The latest information on the new amendments and standards are provided in sections, Major projects and new Accounting Standards and Other developments.
