As the year comes to a close, we reflect on the corporate reporting landscape. This year will be recognised as a significant milestone for corporate reporting for various reasons.
The year witnessed important corporate reporting milestones across the financial and non-financial reporting segments. On the non-financial reporting segment, it marked the voluntary effective date (January 1, 2024) for the adoption of the first IFRS sustainability disclosure standards, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures).
It was also the year when multiple jurisdictions issued their roadmap for the mandatory adoption of the IFRS sustainability standards.
For example, the adoption road map in Kenya was issued with the earliest mandatory adoption date set for January1, 2027 (with limited assurance mandatory from January 1, 2028).
These mandatory obligations on organisations have made non-financial and financial reporting a centrepiece of corporate reporting.
Organisations are, therefore, encouraged to provide a consistent, comprehensive and connected picture between their financial and non-financial reports and avoid a silo approach to reporting going forward.
Also, in 2024, the International Auditing and Assurance Standards Board published the final standard on sustainability assurance, ISSA 5000.
On the financial reporting front, there were many landmark events notable among them was the International Accounting Standards Board issuance of two new accounting standards, IFRS 18 (Presentation and Disclosures in Financial Statements) and IFRS 19 (Subsidiaries without Public Accountability) both effective from January 1, 2027.
IFRS 18 will change how financial statements are presented, replacing the previous IAS 1, issued in 1997. It provides five categories for classifying income and expenses in the income statements—operating, investing, financing, income taxes and discontinued operations.
It also introduces consistent principles for the grouping and labelling of items. IFRS 19 is a voluntary standard for eligible subsidiaries that do not have public accountability and whose ultimate or intermediate parent produces consolidated financial statements available for public use that comply with IFRS accounting standards.
Organisations that apply IFRS 19 would benefit from simplified reporting systems and processes without compromising the overall utility of the financial statements. Organisations will have to plan and prepare to implement these two new standards.
The writer is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.
