18 Questions
When was the IFRS S1 and IFRS S2 regulation set to become effective?
January 1, 2024
Which organization was asked to assume the role of monitoring the progress of corporate climate-related disclosures after the TCFD was disbanded?
IFRS Foundation
For which affected companies is SB-253 applicable?
Public and private companies in the E.U.
When is the first mandatory reporting under the Final Rule expected to start?
2025
Which piece of legislation sets the starting date for disclosure requirements in the U.S.?
California Climate Disclosure Legislation (SB-253 and SB-261)
Which entity might be required to comply with the CSR/ESRS disclosure regulations starting in 2024?
Public and private companies in the E.U.
When should registrants provide transition disclosures about the impact of recently issued accounting standards on financial statements?
Upon the adoption of the accounting standards
When will the financial statement disclosures regarding recently issued accounting standards be subject to existing financial statement audit requirements?
Before the compliance date
Which regulation was amended to require specific disclosures enumerated in Regulation S-X, Article 14?
Regulation S-X, Article 8
Why should registrants begin establishing accounting policies and internal controls in advance of their compliance date?
To address financial statement disclosures about recently issued accounting standards
Which section of the regulations governs the financial statements required for Smaller Reporting Companies (SRCs)?
Article 8
In what section of the SAB Topic 11.M are registrants required to provide transition disclosures?
(SAB 74)5
What is the main requirement of the IFRS Sustainability Disclosure Standards?
To include sustainability-related financial disclosures in financial reports
How did the final rule address concerns regarding the adoption timeline for large accelerated filers?
Extended the adoption timeline
What does the final rule establish regarding the materiality threshold for Scope 1 and Scope 2 GHG emission metrics?
Registrants can omit this information if it's not material
Under the final rule, how many years do large accelerated filers have to obtain limited assurance over GHG emissions?
Six years
What was the adoption timeline for large accelerated filers under the proposed rule?
One year
What was the main concern addressed by establishing a materiality threshold for Scope 1 and Scope 2 GHG emission metrics?
Allowing registrants to omit immaterial GHG emission disclosures
Study Notes
Disclosure Regulations
- The TCFD (Task Force on Climate-related Financial Disclosures) was disbanded on October 12, 2023, and the Financial Stability Board asked the IFRS Foundation to monitor corporate climate-related disclosures.
Comparison of Disclosure Regulations
- The CSRD/ESRS (European Union's Corporate Sustainability Reporting Directive/European Sustainability Reporting Standards) has a first mandatory reporting deadline starting with 2024, depending on entity structure and size.
- The IFRS Sustainability Disclosure Standards require sustainability-related financial disclosures in general-purpose financial reports.
California Climate Disclosure Legislation
- SB-253 and SB-261 require climate-related disclosures, with a first mandatory reporting deadline in 2025 (due in 2026) for affected companies.
Final Rule
- The final rule applies to public companies registered with the SEC and has a transition timeline, with large accelerated filers having nearly two years to provide most disclosures.
- The final rule establishes a materiality threshold for Scope 1 and Scope 2 GHG emission metrics, allowing registrants to omit disclosures if not material.
- Registrants should establish accounting policies and internal controls in advance of their compliance date.
Audit Considerations and Internal Controls
- Financial statement disclosures will be subject to existing financial statement audit requirements and management's internal control over financial reporting (ICFR).
Deloitte, March 15 2024
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