Cover paper (Agenda Paper 14)

In this paper, the staff set out the objective of the session, which is to explore targeted actions to improve the reporting of climate-related and other uncertainties in the financial statements.

This paper was not discussed as it was an overview paper.

Project direction (Agenda Paper 14A)

In this paper, the staff summarised the main comments from the IASB and members of the Accounting Standards Advisory Forum (ASAF) on the previous actions to:

• explore the development of illustrative examples of reporting the effects of climate-related and other uncertainties in the financial statements; and
• explore standard-setting to clarify or enhance existing requirements in IFRS Accounting Standards.

Staff recommendation

The staff recommended that the IASB provides illustrative examples accompanying IFRS Accounting Standards. The IASB was asked if they agree with the staff recommendation to:

• provide examples illustrating how to apply requirements in IFRS Accounting Standards to report the effects of climate-related and other uncertainties in the financial statements;
• include the examples as illustrative examples accompanying IFRS Accounting Standards; and
• consult on these proposals through an exposure draft (ED).

IASB discussion

IASB members were in favour of the staff recommendation. Some IASB members observed that it may be important to give consideration to connectivity between the financial statements and other information reported outside the financial statements. However, caution was expressed from others, given the uncertain landscape around the reporting frameworks and other jurisdictional requirements that may be adopted in relation to sustainability reporting. They cautioned that such consideration given to connectivity should not imply that IFRS Accounting Standards need to be applied with IFRS Sustainability Disclosure Standards.

Some IASB members suggested that asking whether future standard-setting should be explored may distract from the illustrative examples in the ED. Therefore, care should be taken in how this question is drafted. It was also noted that the invitation to comment should be explicit in that these examples reflect the existing requirements of IFRS Accounting Standards and do not go beyond current requirements.

Some IASB members also observed that the title of the project including “other uncertainties” may be confusing when the draft examples provided are mostly climate-related. However, others noted that these examples can be referred to by analogy when considering other types of uncertainty.

IASB decision

All IASB members agreed with the staff recommendation.

Due process and permission to begin the balloting process (Agenda Paper 14B)

In this paper, the staff set out their analysis regarding the transition and effective date for the illustrative examples proposed in Agenda Paper 14A. The staff concluded that illustrative examples do not have an effective date or transition requirements in accordance with the Due Process Handbook.

The staff also outlined the due process steps for the publication of an ED.

IASB decision

All IASB members agreed to set a 120-day comment period for the ED.

All 14 IASB members confirmed they were satisfied the IASB has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the ED.

No IASB member indicated an intention to dissent from the proposals in the exposure draft.

Development of examples (Agenda Paper 14C)

This paper was presented as Agenda Paper 14A in the March 2024 meeting. The purpose of this paper was to explain the approach the staff have taken to develop examples illustrating how to apply requirements in IFRS Accounting Standards to report the effects of climate-related and other uncertainties in financial statements. This paper also explained the staff’s view on the best vehicle for these examples (that is, the best manner in which to communicate the examples to stakeholders).

This paper was included for information only and was therefore not discussed.

Staff draft examples (Agenda Paper 14D)

This paper was presented as Agenda Paper 14B in the March 2024 meeting. This paper contained the staff's draft examples to illustrate how to apply IFRS Accounting Standards to report the effects of climate-related and other uncertainties in the financial statements. Agenda Paper 14C explained the approach the staff took to develop the examples.

This paper was included for information only and was therefore not discussed.