Hey everyone,
We’ll begin this edition with the final versions of the examples on reporting uncertainties in financial statements. You may remember that this project started as Climate-related and Other Uncertainties, but the IASB has since broadened it to cover all types of uncertainties, with climate change used only as an illustration.
The FRC’s review of IFRS reporting in small public companies is another highlight in this issue, so…
Let’s dive in!
Examples on reporting uncertainties
The IASB published six illustrative examples on reporting uncertainties in financial statements. These scenarios include:
- Materiality judgements on including additional disclosures.
- Disclosing assumptions under specific IFRS requirements (like IAS 36) and the general requirements in IAS 1/IFRS 18.
- Credit risk disclosures under IFRS 7.
- Decommissioning and restoration provisions under IAS 37, and
- Disaggregating information under IFRS 18.
For now, the final versions are available for paid subscribers only, but the IASB press release notes that they are essentially the same as the near-final drafts published in July. My understanding is that each example will be added as an accompanying example to the relevant IFRS and will therefore become part of the consolidated 2026 edition, for which illustrative examples are available free to all registered users via the standards navigator. A short overview and commentary by Deloitte is also available.
As accompanying materials, these examples do not have an effective date, so they technically apply immediately. Or, as the IASB put it, ‘companies would be expected to implement any change in their reporting on a timely basis’. My bet is that, in practice, the ‘timely basis’ means incorporating them for 31 December 2025 year ends.
Technical Publications
Financial reporting by smaller listed companies
Small public companies, those outside major indices like the FTSE 350 or STOXX 600, often lack the resources to develop strong IFRS expertise, and it sometimes shows in their financial statements. The FRC has noted that such companies are much more likely to receive ‘substantive’ regulatory enquiries, which in turn often result in restatements. Hoping to improve this situation, the latest thematic review focuses on common areas where their financial reporting needs attention, and which investors also focus on. These areas include revenue, cash flow statements, impairment of non-financial assets and financial instruments.
As always with FRC publications, it’s a worthwhile read with plenty of actual disclosure examples (both good and not-so-good), along with specific recommendations for improvement.
Pension accounting (and more)
The Footnotes Analyst team published an interesting article on differences between pension accounting in IFRS and US GAAP and their impact on investors. I was blown away by how material pension liabilities can be in sectors with generous legacy defined benefit plans, sometimes exceeding 10% of a company’s market cap!
But if pension accounting isn’t your thing, hold on for a moment. This piece also touches on another aspect that applies more broadly. It caught my eye because we discussed the same issue just two weeks ago on the IFRS Community forums.
So, what’s that issue? It’s that the NAV (net asset value) of an investment fund is not the same as the fair value of the fund from the investor’s perspective. This is true even if the fund measures all its holdings at fair value and is especially relevant when the underlying holdings aren’t publicly traded. Here’s a link that should take you to that specific paragraph.
IFRS Interpretations Committee Meeting
The IFRS Interpretations Committee met in late November and discussed new application queries. However, the IFRIC Update wasn’t available as I finalised this edition of Reporting Period, so we’ll catch up next month.
Work in Progress at the IASB
Here are the key updates from the IASB’s agenda.
Translation to a hyperinflationary presentation currency
The IASB has issued narrow-scope amendments to IAS 21 that apply when an entity’s presentation currency is hyperinflationary while its functional currency is not, or when an entity with a hyperinflationary functional and presentation currency translates a foreign operation whose functional currency is not hyperinflationary.
These amendments, available to premium IFRS subscribers for now, are effective from 1 January 2027, with early application permitted.
Learn more in EY publication.
Next milestone: none, project closed. So, technically, it’s no longer a work-in-progress, but I’ve placed it here rather than at the very top as I suspect most of you are unlikely to be in the scope. But if you are, I’d be happy to hear from you!
IFRS in EPUB format
The IFRS Foundation will soon be releasing IFRS in EPUB format. It’ll be a welcome upgrade from those good old PDFs. In EPUB, the text reflows to any screen, so you can read long sections on a phone or tablet without constant pinching and zooming. Search, notes, bookmarks and internal links should also work more smoothly and reliably. And hey, you won’t run out of things to read on your e-book reader ever again 😉
Don’t worry if you prefer PDFs, though. I don’t think they’ll retire those versions any time soon.
Perhaps this will be a good reason to become a paid subscriber at IFRS.org? Full disclosure: Reporting Period is NOT sponsored by the IFRS Foundation 😉
Miscellany
Join the IFRS Interpretations Committee
The IFRS Foundation is seeking three individuals to join the IFRS Interpretations Committee. It’s a chance to contribute to the IFRS development process and perhaps break the monotony at work without switching jobs. And if you’re into corporate status games, that might be a worthwhile investment too 😉
Interested? Apply by 28 February 2026.
That’s all for this edition of Reporting Period. Thanks for reading and see you in the next issue!
By the way, are you sure you’ve told all your colleagues how awesome Reporting Period is? 😉 If not, our HQ is at ReportingPeriod.com. Many thanks!
Best regards,
Marek