New guidance on transition strategies for IFRS unveiled

The International Accounting Standards Board (IASB) has announced a series of initiatives aimed at enhancing the quality and consistency of financial reporting, particularly in the context of climate change and sustainability.

In a move towards a more proportionate approach to reporting, the IASB has released a reduced disclosure regime for eligible subsidiaries. This is an example of the IFRS's commitment to proportionality in reporting, as advocated by Andrew Barckow, the chair of the IASB.

Barckow, however, has cautioned against regulatory complacency, particularly in the face of growing political pressures. He noted growing signs of fragmentation in the global economy, including geopolitical tensions, protectionist policies, and shifting trade relationships. Despite these challenges, Barckow emphasised that the IFRS cannot prevent fragmentation but will provide and maintain high-quality global standards, support consistent application, and work constructively with stakeholders to sustain confidence in the system.

The IASB's efforts are focused on supporting the implementation of IFRS S2, a climate-focused sustainability standard. The guidance unveiled by the IASB is intended to address the fragmentation of disclosures about transition plans and provide inspiration for entities applying IFRS S2.

In addition to the new guidance, the IFRS Foundation has announced research plans for biodiversity, ecosystems, ecosystem services, and human capital reporting. Preliminary research suggests there is investor need for standards in these areas, according to the IFRS.

The International Sustainability Standards Board (ISSB) has also published an exposure draft aimed at enhancing sector-specific guidance from the Sustainability Accounting Standards Board (SASB). The draft covers nine priority industries and 41 other sectors. The IFRS views this as a form of enhancement and is building from the SASB standards.

The IFRS has also released comprehensive guidance on disclosures relating to transition plans. This guidance is intended to support entities in their transition to a more sustainable future.

It is worth noting that the organization that published comprehensive guidelines on disclosure requirements for the implementation of IFRS S2, the climate-oriented sustainability standard, in London on the last day is not explicitly mentioned in the provided search results. However, IFRS standards, including IFRS S2, are developed and published by the International Accounting Standards Board (IASB), which is the authoritative body for IFRS standards.

This article was last updated on June 26, 2025. The IASB's initiatives are a testament to its commitment to maintaining high-quality global standards and supporting consistent application in the face of complex and evolving global challenges.