ISSB ISSB Transition and Compliance

Question 1

What is the effective date of IFRS S1 and IFRS S2 for first-time adopters under the ISSB framework?

Accepted Answer

Annual reporting periods beginning on or after January 1, 2024

Answer

Immediately upon publication in June 2023 for all large entities

Answer

January 1, 2025 for all entities globally

Answer

The effective date is set by each jurisdiction independently

Question 2

Under the ISSB transition provisions, what flexibility is provided for disclosures about sustainability risks other than climate in the first year?

Accepted Answer

Entities may limit their first-year disclosures to climate-related risks under IFRS S2 and need not apply IFRS S1 to all other sustainability topics simultaneously

Answer

All sustainability topics must be addressed from day one — no flexibility is granted

Answer

Entities may delay all sustainability disclosures for three years while building data systems

Answer

Only social topics (not environmental or governance) may be deferred

Question 3

What is the 'comply or explain' approach used in some jurisdictions' implementation of ISSB standards?

Accepted Answer

Entities must either comply with ISSB standards or explain why specific requirements are not applicable or have not been met

Answer

Entities choose whether to comply with ISSB or the GRI framework and explain their choice

Answer

'Comply or explain' means entities can decline any ISSB requirement by writing an explanation in the annual report

Answer

This approach only applies to small and medium-sized enterprises in developing markets

Question 4

Under IFRS S1, what comparative period information is required in the second year of applying the standards?

Accepted Answer

Entities must provide comparative information for the preceding period to enable trend analysis

Answer

No comparative information is ever required under IFRS S1

Answer

Three years of comparative data are required from the second year onward

Answer

Comparative information is only required if entity performance deteriorated

Question 5

How should an entity handle a change in methodology for measuring a sustainability metric under IFRS S1?

Accepted Answer

Entities should restate prior periods using the new methodology and explain the reason for change and its effect on comparability

Answer

Methodology changes may be made freely with no restatement required

Answer

Any methodology change requires ISSB approval before implementation

Answer

Changes in measurement methodology are prohibited once a methodology is first applied

Question 6

What is a key compliance challenge for US companies voluntarily adopting IFRS S2 given the current US regulatory environment?

Accepted Answer

Aligning IFRS S2's Scope 3 requirements with US SEC rules that do not mandate Scope 3 disclosure, creating potential dual-reporting burdens

Answer

The US dollar is not an accepted reporting currency under IFRS S2

Answer

IFRS S2 requires IASB financial statement adoption, which conflicts with US GAAP

Answer

US companies must receive SEC no-action letters before disclosing under IFRS S2