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EP Publishes Motion for Resolution on ESRS Delegated Act

On 11 October 2023, the European Parliament (EP) published a motion for a resolution on the delegated act (DA) on the European Sustainability Reporting Standards (ESRS). This comes after the ESRS DA’s adoption by the European Commission (EC) on 31 July 2023 and subsequent submission to the EP and European Council (the Council) for scrutiny.

Through this motion, which will be subject to a vote at the next EP Plenary, the EP calls on the EC to submit a new delegated act based on a number of recommendations. The full motion may be accessed here.

ISSB Sustainability Standards

On 26th June 2023, the International Sustainability Standards Board (ISSB) issued its inaugural standards:

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information to require an entity to disclose information about its sustainability-related risks and opportunities; and
IFRS S2 Climate-related Disclosures to require an entity to disclose information about its climate-related risks and opportunities. This Standard is designed to be used with IFRS S1.

Adoption of ESRS by the European Commission

On 31st July 2023, the European Commission adopted the European Sustainability Reporting Standards (ESRS) for use by all companies subject to the CSRD. Read more here, including questions and answers on the adoption of European Sustainability Reporting Standards.

IAASB: Guidance on Citing IFRS Accounting Standards

New guidance has just been issued by the International Auditing and Assurance Standards Board (IAASB) to help stakeholders understand how to reference IFRS Accounting Standards to follow recent updates to the IFRS Foundation Trademark Guidelines. The Guidance aims to clarify how auditors or practitioners should refer to the IFRS Accounting Standards in their reports, while also delving into the changes IAASB will adopt for future editions of the IAASB handbook to highlight existing references to the IASs and IFRSs.

More information is available here.

IFRS: Summaries of reports on materiality

The IFRS Foundation published a summary of evidence gathered by national standard-setters on the effects of guidance on materiality judgements in IFRS Accounting Standards and other materials.

European Council and European Parliament Reach Provisional Deal on CSDDD

The Council and the European Parliament have reached a provisional deal on the Corporate Sustainability Due Diligence Directive (CSDDD). This Directive aims to enhance the protection of the environment and human rights in the EU and globally.

The CSDDD will set obligations for large companies regarding actual and potential adverse impacts on human rights and the environment, with respect to their own operations, those of their subsidiaries, and those carried out by their business partners.

More information is available here.

IFRS Sustainability Knowledge Hub

The IFRS Foundation has launched the IFRS Sustainability knowledge hub to support use of the ISSB Standards from 2024. The hub went live at COP28’s Climate Action Day and is a key component of the IFRS Foundation’s capacity building programme.

The hub hosts content developed by the IFRS Foundation, and more than 100 resources developed by third-party organisations. Materials will be added over time in response to market needs and emerging practices.

While the hub has been designed to help companies preparing their ISSB disclosures, it will also be a useful repository for auditors, investors, regulators, and other stakeholders seeking to advance their understanding of the ISSB Standards.

Resources on the hub include an introduction to the ISSB Standards, a guide for transitioning from TCFD recommendations to ISSB Standards and a set of Frequently Asked Questions (FAQs).

EFRAG releases first set of explanations on ESRS questions and answer platform

In the fourth quarter of 2023, EFRAG launched its ESRS Q&A Platform to collect and answer technical questions, supporting preparers and other stakeholders with the implementation of the European Sustainability Reporting Standards (ESRS) issued as Delegated Act.

EFRAG has now released the first set of Explanations to respond to questions received. These responses are provided as part of its role of technical advisor to the European Commission and are expected to provide a practical and timely support for preparers and others in the implementation of ESRS.

Read more.

EFRAG Online survey on the effects of IFRS 16

FRS 16 Leases was issued by the IASB on 13 January 2016 and had a mandatory effective date of 1 January 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases.

Over the following years, the IASB issued some amendments to IFRS 16, including those related to Covid 19 related rent concession (in May 2020) and to the accounting for lease liability in a sale and leaseback transaction when the payments include variable payments (in September 2023).

In December 2023 the IASB decided to start the post-implementation review (PIR) of IFRS 16 in Q2 2024. The IASB’s decision was based on guidance from the Due Process Handbook and the discussion on the clarifications of the objective, process and outcome of a PIR.

The objective of this survey is to help the EFRAG Secretariat to better understand whether IFRS 16 works overall as intended. In particular, the purpose of this survey is to collect your input about issues you may have encountered arising from the application of IFRS 16 including its interaction with other IFRS Accounting Standards, whether they are common and widespread, and how the IASB should address them in the context of a PIR.

This survey is aimed at preparers of financial statements, auditors, national standard-setters and regulators.

EFRAG invites stakeholders to answer by 15 April 2024.

Take survey here.

IESBA staff releases high-level summary of prohibitions in the IESBA code for audits of public interest entities

The Staff of the International Ethics Standards Board for Accountants (IESBA) released a high-level summary of prohibitions in the International Code of Ethics for Professional Accountants, (including International Independence Standards), especially in relation to independence for audits of public interest entities (PIEs).

The high-level summary is not a substitute for reading the Code. It is designed to highlight non-assurance services, relationships, interests or circumstances that are prohibited for PIE audits.

Overview of the IESBA’s proposed Ethics Standards for Sustainability Reporting and Assurance

The International Ethics Standards Board for Accountants (IESBA) has released an executive summary of the proposed International Ethics Standards for Sustainability Assurance (IESSA), including International Independence Standards, and ethics standards for sustainability reporting.