On 31st January 2022, the Climate Disclosure Standards Board (CDSB) was consolidated into the IFRS Foundation to support the work of the newly established International Sustainability Standards Board (ISSB). While this site and its resources remain relevant for preparers looking to improve sustainability disclosure until such time as the ISSB issues its IFRS Sustainability Disclosure Standards on such topics, no further work or guidance will be produced or published by CDSB. For further information please visit the IFRS website.

Accounting for climate

Integrating climate-related matters into financial reporting

ACCOUNTING FOR CLIMATE GUIDANCE

CDSB has identified a need to support preparers in integrating climate-related matters into the financial statements. This guidance does not seek to create new accounting standards in relation to climate-related matters, but builds on International Accounting Standards Board’s (IASB) position on how climate-related matters should be integrated into financial reporting based on current International Financial Reporting Standards (IFRS) Standards.

This guidance will seek to address three main questions. Are climate-related matters relevant to financial reporting? How should climate-related matters be factored into a company’s financial reporting and what this might look like? What steps can companies take to integrate material climate-related matters into financial reporting?

This guidance explores in detail four of the IFRS Standards that were identified in that paper, which are considered to be relevant for most companies and applicable to a range of sectors and geographies:

IAS 1   – Presentation of Financial Statements;
IAS 37 – Provisions, Contingent Liabilities and Contingent Assets;
IAS 36 – Impairment of Assets; and
IAS 16 – Property, Plant and Equipment.

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ACCOUNTING FOR CLIMATE SUPPLEMENTARY PAPER 1

This paper provides supplemental guidance on how climate-related matters could be integrated in areas of the financial statements identified by the IASB and IFRS Foundation that were not considered in the December 2020 guidance. This document explores climate reporting in the context of the following standards:

IFRS 13 – Fair Value Measurement;
IFRS 9   – Financial instruments;
IFRS 7   – Financial instruments: Disclosure;
IAS 2     – Inventories;
IAS 12   – Income Taxes; and
IFRS 17 – Insurance Contracts.

For each of the standards covered, this paper identifies essential accounting and disclosure matters relevant from a climate perspective. These are not exhaustive but illustrate key matters that companies might need to consider. Alongside this discussion, a number of illustrative examples have been developed, which are found in the Appendix.

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ACCOUNTING FOR CLIMATE SUPPLEMENTARY PAPER 2

This additional supplementary paper considers certain other IFRS standards not covered in the two previous papers. Those standards include:
IFRS 16 – Leases;
IFRS 2   – Share-based payment;
IAS 19   – Employee benefits;
IFRS 15 – Revenue from contracts with customers;
IFRS 6  – Exploration for and evaluation of mineral resources; and
IAS 41   – Agriculture.

For each of the standards covered, this paper identifies essential accounting and disclosure matters relevant from a climate perspective. These are not exhaustive but illustrate key matters that companies might need to consider. Alongside this discussion, a number of illustrative examples have been developed, which are found in the appendix.

Readers should be aware that the examples included in this guidance are only intended to demonstrate, as a starting point, the range of climate-related matters that preparers might need to consider as well as the relevant accounting considerations.

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ACCOUNTING FOR CLIMATE CHECKLIST

This checklist has been produced to support preparers in identifying where climate-related matters may be relevant in the preparation and presentation of financial statements in accordance with International Financial Reporting Standard (IFRS Standards), as issued by the International Accounting Standards Board (IASB).

It is intended to prompt preparers as to when climate-related matters may be relevant in relation to the accounting for and disclosure of various financial statement disclosure items. It builds on previous “Accounting for climate” papers that have been produced by CDSB and which should be referred to for more detailed guidance:

Accounting for climate
Accounting for climate – Supplementary paper 1
Accounting for climate – Supplementary paper 2

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