Proposal on Interim Disclosure Rules to be Reexposed for Public Comment

FASB has voted to issue a second proposal for interim disclosure rules, provisions companies would use to file quarterly reports with the SEC. Companies have 90 days to comment. The guidance would streamline interim disclosure requirements in the GAAP codification literature, as opposed to change current practice, according to board discussions. “I don’t think that there is a change to practice,” Vice Chair James Kroeker said. “I view this really as a clean up of the codification,” he said. “This could have been done at the time we did the codification, but we did keep this awkward set of requirements, some of which were contained in the interim guidance, sometimes it was in the cod section, sometimes it was a portion in the interim, and so it was just confusing to a user of the cod what are those requirements,” he said. The new proposal will revise the 2021 proposed Accounting Standards Update (ASU) 2021-001, Interim Reporting (Topic 270): Disclosure Framework—Changes to Interim Disclosure Requirements, in areas “around the methodology used to determine interim disclosures; the interim disclosure principle; the descriptions of the form and content of interim disclosures; and the form and content requirements from the 2021 proposed update.” As was the goal of the 2021 proposal, the revisions “would allow companies to use the codification more efficiently and effectively” and isn’t expected to result “in a significant change in practice for entities,” staff told the board. “Overall, the staff believes that expected benefits of the guidance resulting from this project justify the potential cost of application.”

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ISSB Pressing to Advance Adoption of Sustainability Disclosure Rules in Africa

International Sustainability Standards Board (ISSB) Chair Emmanuel Faber and another board member recently met with high-ranking officials in three African nations to discuss “considerations for implementation” of sustainability disclosure standards, among other matters. Faber and ISSB board member Ndidi Nnoli-Edozienwith met with President William Ruto of Kenya; President Bola Ahmed Tinubu of Nigeria; and government ministers in South Africa, according to a March 27 board announcement. The ISSB members also met with regulators, among others, to discuss the work of the ESG rulemaking board. “A key theme of discussions throughout the week was around the opportunity for unlocking capital flows through the introduction of the ISSB standards,” the board said. Further, the ISSB heard “about the expected benefits from establishing transparency within value chains, providing investors with a great understanding of the associated sustainability-related risks and opportunities through comparable, reliable and assurable disclosures.” As part of the trip, the IFRS Foundation announced a partnership with the UK Foreign, Commonwealth and Development Office (FCDO) and the Pan African Federation of Accountants (PAFA), the board also said. FCDO “will provide seed funding to PAFA to create a comprehensive PAFA ISSB Capacity Building Strategy for the African Continent,” the announcement stated. The program will “aim to empower PAFA’s network of 125,000 African accountants on the use of the ISSB standards and assist global progress towards high-quality, comparable sustainability-related financial information.”

Canada, Japan, Singapore Consult on Adopting New International Sustainability Disclosure Rules

Canada, Japan, and Singapore recently issued proposals to facilitate the adoption of the International Sustainability Standards Board’s (ISSB) two new disclosure standards, the board announced on April 3. This comes on the heels of similar steps by 13 other countries, which signals that efforts are rapidly advancing worldwide to adopt the landmark guidance. “We welcome consultations by jurisdictions around the world including most recently in Canada, Japan and Singapore,” ISSB Chair Emmanuel Faber said in a statement. “The consultations demonstrate the momentum towards a global baseline of sustainability-related disclosures so that investors have access to high-quality, comparable information,” he said. “We encourage stakeholders to engage proactively with these consultations, as the ISSB continues to work with jurisdictions on their journeys to adoption or other use of our standards.” Specifically, the Canadian Sustainability Standards Board (CSSB) proposed the first Canadian Sustainability Disclosure Standards based on IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2, Climate-related Disclosures, “with some brief extensions to transition reliefs.” Canada’s rules would take effect in January 2025, the announcement states. The comment period ends on June 10, 2024. Furthermore, the Sustainability Standards Board of Japan (SSBJ) proposed to “incorporate all requirements” in S1 and S2 and add “when considered necessary, any jurisdiction-specific options the entity can choose to apply.” The comment period ends on July 31, 2024.