REPORTING

ISSB - Frequently Asked Questions

May 14, 2022

Article Highlights

  • IFRS does not require companies that follow the IFRS Sustainability Disclosure Standards to also follow the IFRS Accounting Standards.

  • Jurisdictional authorities will decide whether to require the IFRS Sustainability Disclosure Standards.

  • The IFRS plans to finalise and issue two IFRS Sustainability Disclosure Standards by the end of 2022.

  • Once the IFRS Sustainability Disclosure Standards are issued, voluntary adoption of the requirements will be available.

Would a company that applies IFRS Accounting Standards also be required to comply with the IFRS Sustainability Standards?

No. IFRS Accounting Standards apply to financial statements. A jurisdiction that requires compliance with the IFRS Account Standards will determine whether to require compliance with the IFRS Sustainability Disclosure Standards.

Is a company required to apply IFRS Accounting Standards to be able to apply IFRS Sustainability Disclosure Standards?

No. The Sustainability Disclosure Standards are designed to work with any GAAP - including the IFRS Accounting Standards.

Would IFRS Sustainability Disclosure Standards be mandatory?

Jurisdictional authorities would decide whether to require the application of IFRS Sustainability Disclosure Standards, just as they have decided whether to require the application of IFRS Accounting Standards. The ISSB does not have the right to mandate the application of its Standards. However, companies can choose to apply them.

When are the proposed Standards likely to come into effect?

One of the questions in the proposals is how long companies think they would need to prepare to apply the proposals.

The ISSB will consider all feedback on the proposals, in compliance with the IFRS Foundation’s rigorous due process requirements, and aim to finalise twoIFRS Sustainability Disclosure Standards by the end of 2022. During these redeliberations, the ISSB will consider the effective dates of the Standards. Once the Standards are issued, the requirements would be available for immediate voluntary adoption.

Key Takeaways

Tasks to help you prepare

  • The IFRS Sustainability Disclosure Standards are scheduled to be finalized by the end of 2022.