The International Accounting Standards Board (IASB) issued IFRS 18, Presentation and Disclosure in Financial Statements in April 2024. IFRS 18 supersedes IAS 1, Presentation of Financial Statements with effect from accounting periods beginning on or after 1 January 2027. Under current IFRS Accounting Standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. IFRS 18 promotes a more structured income statement and introduces a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities. IFRS 18 will affect companies across all industries that prepare financial statements under IFRS Accounting Standards. This edition of Accounting and Auditing Update (AAU) discusses the new standard IFRS 18 and aims to provide an overview of the key requirements of IFRS 18.
With increasing focus on climate threat, Governments around the globe have made commitments to limit global warming and reach net zero carbon emissions by 2050 (or earlier). Carbon markets are crucial in meeting these commitments as they allow governments and organisations to efficiently regulate emissions and emission reduction limits. Under the Paris Agreement, India has set ambitious targets to reduce the intensity of carbon emissions by 45 per cent. Aligned with this vision, the country has developed a comprehensive strategy to achieve net-zero emissions by 2070, emphasising environmentally friendly practices. Considering these commitments, Carbon Credit Trading Scheme, 2023 (CCTS 2023) was notified by the Government of India in June 2023 under the Energy Conservation Act, 2001. Additionally, in October 2023, the Green Credit Rules, 2023 were notified, by the Ministry of Environment, Forest and Climate Change (MoEFCC). These rules aim to initiate a Green Credit program that utilises a competitive market-based approach to encourage voluntary environmental actions by stakeholders. Our article on this topic aims to provide an overview of the recent developments around the carbon credit and green credit markets. As is the case each month, we have also included a regular round-up of some recent regulatory updates in India and internationally.
We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of the AAU.
For more information on this update, please write to aaupdate@kpmg.com.
