The International Accounting Standards Board (IASB) has published a consultation document proposing eight illustrative examples to show how companies can apply IFRS Accounting Standards when reporting the effects of climate-related and other uncertainties in their financial statements.

These examples were developed in response to strong demand from stakeholders, especially investors, who expressed concerns that information about climate-related uncertainties in financial statements was often inadequate or inconsistent with information provided elsewhere. To address these concerns, the IASB’s proposed examples aim to:

• Enhance the transparency of information in financial statements.
• Strengthen the link between financial statements and other company reports, such as sustainability disclosures.

The eight examples focus on areas including materiality judgments, disclosures about assumptions and estimation uncertainties, and the disaggregation of information. The principles and requirements demonstrated in these examples are applicable to other types of uncertainties, not just those related to climate.

These illustrative examples are part of a broader initiative by the IASB to improve the reporting of climate-related and other uncertainties in financial statements.

In creating these examples, the IASB worked closely with members of the International Sustainability Standards Board (ISSB) and its technical staff. This collaboration ensures that the examples align with the ISSB’s sustainability-related disclosure requirements.

Andreas Barckow, Chair of the IASB, said:

Investors have clearly communicated that they factor climate-related risks into their decision-making process. Although our Accounting Standards already address such risks, we have identified a need for illustrative examples to improve the application of these requirements. Our proposed examples aim to provide this clarity, helping companies better communicate in their financial statements how climate-related and other uncertainties affect their financial position and performance.