IASB Issues Updated Guidance on Reporting Uncertainties in Financial Statements

Posted 11 December 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Accounting Standards Board (IASB) has released updated illustrative examples and implementation guidance to assist entities in reporting the effects of uncertainties within financial statements.

In terms of the International Financial Reporting Standards (IFRS) framework, the IASB published the final Exposure Draft titled Illustrative Examples and Implementation Guidance on Risk Mitigation Accounting (Proposed amendments to IFRS 9 and IFRS 7). These examples are designed to improve the application of existing disclosure requirements where stakeholders previously identified inconsistencies between financial statements and information provided in external reports.

The updated guidance specifically amends the illustrative examples accompanying the following standards:

  • IFRS 7 Financial Instruments: Disclosures
  • IFRS 18 Presentation and Disclosure in Financial Statements
  • IAS 1 Presentation of Financial Statements
  • IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
  • IAS 36 Impairment of Assets
  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets

While the IASB utilized climate-related scenarios as the primary basis for these illustrations, the board has clarified that the underlying principles of disclosure apply broadly to all forms of uncertainty. As these documents are classified as accompanying materials to the IFRS Accounting Standards, they do not have a formal effective date; however, the IASB expects reporting entities to implement these improvements on a timely basis to ensure transparency.

Click here to download the IASB Illustrative Examples and Implementation Guidance on Risk Mitigation Accounting.

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

  • For yourself: You must update your technical knowledge of IAS 36 and IAS 37 to ensure that your assessment of uncertainties, particularly climate-related risks, aligns with the IASB’s latest illustrative guidance.
  • For your business: Your firm must review its financial reporting processes to ensure that disclosures regarding uncertainties are consistent with information provided in management reports and other external communications to avoid regulatory scrutiny.
  • For your clients: Advise clients to perform a gap analysis between their current financial statement disclosures and the new IASB examples to identify if additional quantitative or qualitative information is required for compliance with IFRS 7 and IFRS 18.

Originally published at https://accountingacademy.co.za/news/read/ifrs-iasb-illustrative-examples-on-reporting-uncertainties-in-financial-statements

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