Australian Sustainability Reporting Standards: tentative updates
12 August 2024
The Australian Accounting Standards Board (AASB) has provided an update on the Exposure Draft ED SR1 Australian Sustainability Reporting Standards (ASRS) – Disclosure of Climate-related Financial Information. These standards included ASRS 1 and ASRS 2.
Tentative decisions from the AASB indicate the final standard will likely align more closely with the International Finance Reporting Standards (IFRS) – Sustainability Disclosure Standards S1 and S2.
The revised structure based on the tentative changes include:
- ASRS 1 will be realigned to match the baseline of IFRS S1 General Requirements Standard and will offer general guidance on voluntary reporting for any sustainability topic.
- ASRS 2 will serve as a mandatory, standalone standard focused solely on climate-related issues, incorporating the climate-related content previously included in ASRS 1.
The AASB has made several tentative changes to the ASRS 2 that take a ‘back to baseline’ approach, including:
- Greenhouse gas emissions measurements, conversion and definition
- Cross-industry metrics
- Scope 3 emissions categories
- Climate-related scenario analysis
- Carbon credit definition
- Financed emission disclosure requirements
To view the complete proposed changes, please refer to the AASB Board Decisions: Issue No. 231, Issue No. 232, Issue No 233. KPMG has also shared an excellent summary that compares the ISSB Standards with the ED SR1 and the proposed changes. You can access that document here: KPMG’s AASB Tentative Decisions on Climate-related Financial Disclosures.
The AASB is scheduled to meet on the 26 and 30 of August, where the standard will be debated further, and some of the tentative decisions may be revisited.
AASB ED 331 Climate-related and Other Uncertainties in the Financial Statements
The AASB is seeking feedback on ED 331, which proposes eight examples illustrating how an entity applies the requirements in the AASB Accounting Standards to report the effects of climate-related and other uncertainties in its financial statements. These examples aim to improve the transparency of reported information and strengthen the connection between financial statements and other parts of a company’s reporting.
The initial purpose of the outreach is to collect feedback from Australian stakeholders that would provide the basis for the AASB’s submission letter to the International Accounting Standards Board (IASB). This is how AASB can influence international standards.
However, as Australia has adopted the IFRS Standards, once the IASB issues the IFRS Standards, the AASB reissues the domestic versions. This means that, if the IASB issues these illustrative examples in the future, the AASB will make them available, too. Therefore, influencing the IASB in the drafting stage is important.
The AASB is holding a virtual roundtable discussion on ED 331 on Wednesday, 16 September 2024. Click here for more information.
Contact
If you have any feedback on ED 331, please get in touch with Sarah Collier (sarah.collier@afgc.org.au), or Kristy Barber (Kristy.barber@afgc.org.au) by 18 September 2024.
