Focus On Reporting – Issue 3/2023
Focus On Reporting, providing you with the latest insights in financial reporting
The team
Featured
Climate change – consider the impact on your financial statements
The increasing focus on climate change is driving developments in legislation and reporting requirements globally. These can materially impact the future of your business and financial statements. It is therefore crucial to assess these impacts when making judgements about future cash flows, going concern, asset impairment, fair values, expected credit losses and contingent liabilities. Click here to understand the potential impacts on your financial statements.
Accounting considerations related to economic volatility
Persistent economic volatility requires careful consideration of its impact on financial statements. For example: Higher inflation and interest rates could increase the risk of default by customers and borrowers; Fluctuating interest rates complicate the estimation of discount rates; Volatile commodity prices and exchange rates could indicate impairment or going concern issues; Fixed price contracts could become onerous in high-inflation markets due to rising costs. Read more about the key financial reporting considerations here.
International Tax Reform Pillar Two Model Rules - amended standards
The AASB have issued amendments to AASB 1060 and AASB 112, formalising Pillar Two Model Rules disclosures and introducing a mandatory temporary exception from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes, effective immediately. Entities are required to disclose information on the potential exposure to Pillar Two for annual reporting periods beginning on or after 1 January 2023.
Supplier finance arrangements and liabilities with covenants - amended Standards
Additional disclosures are now required about an entity’s Supplier Finance Arrangements (AASB 107 and AASB 7). SDS reporting - Non-Current Liabilities with Covenants (AASB 1060) has been amended to clarify the classification and settlement of non-current liabilities and introduces additional disclosures.
Is your business exposed to hyperinflationary economies?
Consider whether your business may be operating in, or is exposed to, hyperinflationary economies. IAS 29 must be applied when hyperinflation is observed. Read our publication for a list of hyperinflationary countries which should be considered for IFRS reporting purposes.
Sustainability reporting webcast
Watch the webcast about the connections between accounting and sustainability disclosures, presented by the Vice-Chairs of the IASB and ISSB. This webcast follows the publication of the inaugural IFRS Sustainability Disclosure Standards, IFRS S1 and IFRS S2 earlier this year and highlights the result of the collaborative work between the IASB and ISSB to improve reporting.
