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

IFRS S1 and S2 are effective for annual reporting periods beginning on or after January 1, 2024, though early application is permitted.

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

The ISSB's transition relief allows entities to focus on climate in year one, applying IFRS S2, and then progressively expand to other sustainability topics under IFRS S1.

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

In comply-or-explain regimes, entities that cannot fully comply must explain the reasons, maintaining accountability while allowing flexibility for genuine implementation challenges.

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

From the second year of application, IFRS S1 requires one year of comparative data, enabling investors to observe trends in sustainability performance.

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

Consistent with financial reporting principles, IFRS S1 requires restatement of prior periods when methodology changes materially affect comparability, with explanation of the reasons.

ISSB - International Sustainability Standards Board Practice Test

ISSB - International Sustainability Standards Board Practice Test

ISSB ISSB Transition and Compliance