IAS 37 Launch your Climate Risk Reporting

IAS 37 Launch your Climate Risk Reporting – In February 2020, the Governance Institute Australia published a practical guide to reporting against ASX Corporate Governance Council’s Corporate Governance Principles and Recommendation. IAS 37 Launch your Climate Risk Reporting

Recommendation 7.4 of the new ASX Corporate Governance Council’s Principles encourages entities for the first time to consider and report upon any material exposure to climate change risk. This practical new guide helps you to identify and disclose your climate change risks. IAS 37 Launch your Climate Risk Reporting

Review the guide on the Governance Institute Australia’s website. IAS 37 Launch your Climate Risk Reporting

Here is a summary: IAS 37 Launch your Climate Risk Reporting

Directors’ duties and climate change

In … Read more

Enhancing qualitative characteristic

Comparability, verifiability, timeliness and understand-ability are qualitative characteristics that enhance the usefulness of information that both is relevant and provides a faithful representation of what it purports to represent. The enhancing qualitative characteristics may also help determine which of two ways should be used to depict a phenomenon if both are considered to provide equally relevant information and an equally faithful representation of that phenomenon.

Understandability

Understandability in accounting information implies clarity. Companies must follow standard accounting principles in order to properly report business transactions. If a company fails to do so, then stakeholders are typically unable to follow the company’s accounting information. Essentially, companies that report financial information in their own specific manner strip away understandability and the ability to understand financial reporting.

Notes to the financial statements

Notes to the financial statements that contain information in addition to the statement of financial position, of financial performance, of changes in equity

Prospective financial information

Prospective financial information – There has been increasing demand in recent years for more disclosure of prospective financial information (PFI). Although PFI disclosures are invariably regarded as being relevant to investors, there are also good reasons why they are not made on a regular and comprehensive basis by all companies. Doubts often surround the accuracy, reliability and understandability of such financial information.

In this case the problems arise because of the inherent uncertainty of PFI. A novel feature is the emphasis on verbal explanations to counter the disadvantages of reliance on numbers alone.

Three key principles are: Prospective financial information

  • The reasonable disclosure principle. ‘To be understandable, PFI should contain disclosure that is reasonable, and so PFI should

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More details to present Useful Financial Information

More details to present Useful Financial Information – What are more qualitative characteristics that enhance the usefulness of information that already qualifies as relevant and providing a faithful representation?

The enhancing qualitative characteristics may also help determine which of two ways should be used to depict a phenomenon if both are considered to provide equally relevant information and an equally faithful representation of the substance of the financial outcome of transactions in a business model.

More details to present Useful Financial Information

The enhanced qualitative characteristics are:

  1. Comparability,
  2. Verifiability,
  3. Timeliness, and
  4. Understandability.

Comparability More details to present Useful Financial Information

From Merriam-Webster: A definition of Comparability is the quality or state of being comparable. An example in a sentence explains it all:

 “there’s little comparability between … Read more