Updating how IFRS Standards are set

Global Corporate Reporting Institute��IFRS Today

Highlights

–��Setting IFRS^® Sustainability Disclosure Standards

–��Driving connectivity between financial and sustainability reporting

The Due Process Handbook (the Handbook) of the IFRS Foundation currently outlines the processes to follow when setting IFRS^® Accounting Standards.��

The Trustees of the IFRS Foundation have proposed updates to the Handbook to:��

specify formally the due process for setting IFRS Sustainability Disclosure Standards;��
introduce a process to drive connectivity between financial and sustainability reporting; and��
provide clarifications and enhancements in other areas.

Brian O'Donovan

Global IFRS and Corporate Reporting Leader

��㣨Leyu�� International

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A robust, transparent and inclusive due process is the cornerstone of high-quality standards. The proposed updates are timely and respond to the needs of users. They also pave the way for greater connectivity between financial and sustainability reporting.

Brian O’Donovan

Global IFRS and Corporate Reporting Leader

��㣨Leyu�� International

Setting IFRS Sustainability Disclosure Standards��

Since its inception, the International Sustainability Standards Board (ISSB) has been developing new standards according to the process specified in the Handbook for the International Accounting Standards Board (IASB).

The Trustees propose to update the Handbook to:

formally specify the ISSB’s due process;��
include specific due process for SASB¹ Standards and the related taxonomy; and
clarify that the IASB and the ISSB (the Boards) follow the same due process, except for some specific differences.

Driving connectivity between financial and sustainability reporting��

The IASB and ISSB aim for their respective requirements to work well together to provide a comprehensive package of information for users. To better meet this objective, the proposals introduce a process to:

facilitate knowledge-sharing and coordination between the Boards;
consider opportunities for connections between the Boards�� respective work plans; and
develop standards that are compatible and consistent with each other.

Other proposed updates��

Other proposed updates include the following.

Area	What’s proposed?	What’s the impact?
Post-implementation reviews (PIRs)	Clarify the objective and process	Focus on whether standards are working as intended when developed��
Minor improvements to IFRS Standards��	Expand the scope	Allow the inclusion of minor or narrow-scope amendments to IFRS Standards or accompanying material (e.g. guidance or illustrative examples)
IFRS Interpretations Committee �� Criteria for a new standard-setting project��	Clarify the ‘widespread effect�� criterion	A widespread effect would be when the circumstance or transaction is prevalent and there is diversity in the application of IFRS Accounting Standards
Re-exposure criteria	Delete the requirement to give more weight to changes in recognition and measurement	Changes to disclosures would have equal weight when considering whether re-exposure is necessary

What’s next?��

Have your say on the proposals to amend the due process for setting high-quality IFRS Standards. The proposals are open for comment until 28 March 2025^*.

For further information, speak to your ��㣨Leyu�� contact.

¹ Sustainability Accounting Standards Board.

^* Read our (PDF 236KB)

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