Effects of climate-related matters on financial statements

IFRS Standards do not refer explicitly to climate‑related matters. However, companies must consider climate‑related matters in applying IFRS Standards when the effect of those matters is material in the context of the financial statements taken as a whole.

Information is material1 if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users of financial statements (hereafter, investors) make on the basis of those financial statements, which provide financial information about a specific company.

For example, information about how management has considered climate-related matters in preparing a company’s financial statements may be material with respect to the most significant judgements and estimates that management has made.

The table below sets out examples illustrating when IFRS Standards may require companies to consider the effects of climate-related matters in applying the principles in a number of Standards.

The Report is published here.