New international standards on the way

The International Accounting Standards Board (IASB) will be issuing two new standards in the first half of 2024.

The first of these forthcoming accounting standards is designed to clarify and enhance information companies provide about their financial performance. The other will simplify the financial statements prepared by subsidiaries of listed groups.

The first new accounting standard will result in companies reporting more consistently and transparently on their financial performance, making it easier for investors to compare companies. It will, says IASB, help to build trust between companies and investors and ultimately ease the flow of capital. The IASB is now satisfied that it has refined its original proposals published in 2019 to reflect stakeholder feedback. This new standard is the result of the Primary Financial Statements project and will supersede IAS 1 Presentation of Financial Statements.

The second new accounting standard will reduce disclosure requirements for subsidiaries that are not traded on a public market, or holds assets entrusted to them by their customers. This standard will enable those subsidiaries to prepare full IFRS financial statements locally by using the information reported to their parent company but with reduced disclosures.

The IASB has decided that the effective date of both new Accounting Standards will be for annual reporting periods beginning on or after 1 January 2027 to give companies sufficient time to implement the new requirements. Earlier application will be permitted.