Issue no. 102 | January 2025

This edition of AAU covers recent financial and reporting updates
aau-accounting-and-auditing-update-january-2025

The IFRS Sustainability Disclosure Standards IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2, Climate-related Disclosures issued by the International Sustainability Standards Board (ISSB) form the global baseline for sustainability-related disclosures. The standards require companies to provide a complete and balanced explanation of sustainability-related risks and opportunities. Companies disclose material information about the sustainability-related risks and opportunities that could reasonably be expected to affect entity’s cash flows, its access to finance or its cost of capital over the short, medium, or long term. To support the implementation of IFRS Sustainability Disclosure Standards, in November 2024, the ISSB issued an education material ‘Sustainability-related risks and opportunities and the disclosure of material information’. The educational material provides guidance to help identify and disclose material information about sustainability-related risks and opportunities that are likely to affect an entity’s prospects. This edition of Accounting and Auditing Update (AAU) includes an article summarising the education material.

As the business world evolves, companies may face additional challenges when accounting for more complex transactions and uncertainties - accounting for provisions is one such area and stakeholders have raised concerns in the past relating to accounting for provisions. One of the challenging questions in applying IAS 37, Provisions, Contingent Liabilities and Contingent Assets is when to recognise a provision, specifically how a company determines if it has a present obligation and what a ‘past event’ is. These questions became more prominent with the rise of climate-related commitments and threshold-based obligations. In response, the International Accounting Standards Board (IASB), recently issued an exposure draft to clarify the guidance in IAS 37 and withdraw certain interpretations, including IFRIC 21 Levies. The proposals may result in larger provisions at an earlier date. The impact of the proposals would depend on the nature of a company’s obligations and its existing accounting policies. The publication carries an article on this topic to discuss the key considerations from the amendments proposed by the IASB relating to IAS 37.

As always, we have included a regular round-up of recent regulatory updates in India and internationally.   

We would be delighted to receive feedback and suggestions from you on the topics we should cover in forthcoming editions of AAU.

For more information on this update, please write to aaupdate@kpmg.com

Accounting

Issue no. 102 | January 2025

Accounting and Auditing Update January 2025

 Enforcement Priorities for 2024 Corporate Reporting

Chapter 1

Sustainability reporting- Assessment of sustainability related risks and opportunities

 Accounting for major spares

Chapter 2

Proposed amendments to IAS 37

Regulatory updates

Chapter 3

Regulatory updates


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