The principles-based content of International Financial Reporting Standards (IFRS) means they are flexible enough to address reporting issues such as climate change, said the International Accounting Standards Board’s (IASB) chair Andreas Barckow.
“[T]his important topic is within the scope of many of our current standards, even if it is not mentioned by name,” he said in a keynote speech to the International Corporate Governance Network’s 2022 conference.
He added: “The IASB does not set standards for every emerging risk – whether it is climate change, biodiversity, pandemics or geopolitical conflicts.
“Rather, our principle-based standards already set out requirements that may be applicable.”
His comments come as the board gears up for its March gathering and a discussion of the board’s standard-setting agenda and priorities for the next five years.
Among the plans up for discussion is a potential project on accounting for the effects of climate change.
He said: “As a starting point, we would need to first consider developments in the financial statements now that we have had another year for our climate educational documents to bed down in practice.”
And despite his earlier comment that IFRSs are principles-based and adaptable to new challenges, he conceded that “there may still be a case to do more”.
He pledged the IASB would “work closely” with the newly-formed International Sustainability Standards Board on sustainability reporting challenges.
According to a recently posted agenda paper, staff have recommended the board shortlist a project to deal with climate-change risk. Staff explain that the board would reach a final decision on that and other shortlisted projects at its April meeting.
The proposed shortlist also contains a potential project on pollution-pricing mechanisms.