IFRS Foundation: Draft Examples for Reporting Uncertainties

Posted 27 August 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The IFRS Foundation has published a near-final staff draft providing illustrative examples to assist entities in improving the disclosure of uncertainties within financial statements.

In terms of IFRS Accounting Standards, the International Accounting Standards Board (IASB) developed the document titled “Near-final staff draft—Disclosures about Uncertainties in the Financial Statements Illustrated using Climate-related Examples”. This publication is designed to address stakeholder feedback regarding the perceived insufficiency and inconsistency of information provided about material uncertainties, particularly those originating from climate-related risks.

The 19-page draft provides practical illustrations of how companies can apply existing IFRS Accounting Standards to enhance the transparency of their disclosures. Although the fact patterns used in the examples are climate-specific, the principles and guidance provided are intended to apply broadly to all types of uncertainties that may affect a company’s financial position or performance.

The IASB collaborated with the International Sustainability Standards Board (ISSB) during the development of these examples. This coordination ensures that the illustrative disclosures in the financial statements remain consistent with, and complementary to, the sustainability-related disclosure requirements issued by the ISSB.

Key Objectives of the Illustrative Examples

  • To demonstrate the application of disclosure requirements in IFRS Accounting Standards when reporting on uncertainties.
  • To reduce inconsistencies in how companies report similar types of risks and uncertainties.
  • To provide a bridge between sustainability-related reporting and traditional financial statement disclosures.

Click here to download the 19-page draft document: https://www.ifrs.org/content/dam/ifrs/project/climate-related-other-uncertainties-fs/climate-related-examples-ie-july-2025.pdf

What this means for you, your business, or your clients

  • For yourself: You must review the near-final illustrative examples to ensure your technical understanding of disclosure requirements for material uncertainties aligns with the IASB staff’s latest interpretations.
  • For your business: Your firm should update its financial reporting checklists and internal quality control templates to incorporate the level of detail demonstrated in these examples, particularly for entities exposed to environmental or long-term economic risks.
  • For your clients: Clients will need to implement more robust data collection processes to support the qualitative and quantitative disclosures required to explain how specific uncertainties impact their financial statement line items.

Originally published at https://accountingacademy.co.za/news/read/ifrs-foundation-climate-related-examples-on-reporting-uncertainties-in-the-financial-statements

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