The International Accounting Standards Board (IASB) is consulting on eight examples to illustrate how companies apply IFRS Accounting Standards when reporting the effects of climate-related and other uncertainties in their financial statements. The IASB developed these illustrative examples in response to strong demand from stakeholders, particularly from investors. They expressed concerns that information about climate-related uncertainties in financial statements was sometimes insufficient or appeared to be inconsistent with information provided outside the financial statements. To respond to these concerns, the IASB’s proposed examples aim to:

• improve transparency of information in financial statements; and
• strengthen the connection between financial statements and other parts of a company’s reporting, such as sustainability disclosures.

The eight illustrative examples focus on areas such as materiality judgements, disclosures about assumptions and estimation uncertainties, and disaggregation of information.

The PRI will issue a joint response with the Climate Accounting and Audit Project (CAAP). Our draft response is attached to this collaboration and available for signatory feedback until November 22nd. The response supports the examples and encourages their uptake by the market, before providing more technical input on the specific consultation questions and examples. We have also attached a template letter, in case useful for investors interested in submitting their own response.