Highlights
Investors and regulators are demanding clarity on climate-related matters in financial reporting, so companies should expect increased scrutiny.
As part of its response, the International Accounting Standards Board (IASB) has proposed new illustrative examplesopens in a new tab to help companies target areas of known investor and regulator concern. These examples are based on existing requirements of IFRS® Accounting Standards.
Companies need to consider how the proposals would impact their financial reporting and identify any potential gaps to fill. Remember, information is required if it could reasonably be expected to influence users' decisions.
Which specific disclosure requirements are being targeted?
The proposals highlight three examples of specific requirements in IFRS Accounting Standards that may apply when a company is exposed to climate-related or other uncertainties. Companies may need to disclose:
- information related to key assumptions about future emissions allowance costs and the potential changes to emissions regulation used to calculate value in use;
- information about plant decommissioning and site restoration obligations, as this may be material regardless of the size of provision; and
- information about the effects of climate-related risks on the company’s credit risk exposures and related risk management practices.
Which overarching disclosure requirements are being targeted?
The proposals also highlight examples of overarching disclosure requirements in IFRS Accounting Standards that may apply:
- whether and how announced climate-related strategies and commitments have affected the financial statements – if their impact may otherwise be misunderstood;
- the effect of an uncertainty on the company’s financial performance and position;
- disaggregated information about types of property, plant and equipment that are exposed to dissimilar climate-related matters that do not affect other types; and
- key assumptions and estimates – if there is a significant risk that changes could affect next year’s financial statements (even if the uncertainty is not expected to be resolved in the next year).
What’s next? Consider the proposals and have your say by 28 November 2024
- Consider the IASB’s illustrative examples and how they may impact your financial statements.
- To enhance climate-related disclosures in your financial reports before the proposals are finalised, use KPMG’s Clear on climate reporting hub, in particular:
- Share your views on the consultation by sending a comment letter to the IASB by 28 November 2024.
*Read our comment letter (PDF 226 KB).
© 2025 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.