IFRS Accounting Standards

IASB issues amendments to IFRS 19

The International Accounting Standards Board (IASB®) issued amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures in August 2025. IFRS 19 allows eligible subsidiaries to apply IFRS® Accounting Standards with reduced disclosures. The latest amendments extend these reduced requirements to cover Standards and amendments issued between February 2021 and May 2024, including:

• IFRS 18 Presentation and Disclosure in Financial Statements;
• Supplier finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures);
• International tax reform – Pillar Two Model Rules (Amendments to IAS 12 Income Taxes);
• Lack of exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates); and
• Amendments to the classification and measurement of financial instruments (amendments to IFRS 9 Financial Instruments and IFRS 7). 

As a result, IFRS 19 now reflects all changes effective up to 1 January 2027. 

IFRS Foundation publishes near-final examples on reporting uncertainties

The IFRS Foundation released near-final examples on 24 July 2025 to help companies improve disclosure of uncertainties in financial statements, using climate-related scenarios as illustrations. While climate-focused, the guidance applies broadly to all types of uncertainties. These examples, developed jointly by the IASB and International Sustainability Standards Board (ISSB), aim to bridge financial and sustainability reporting and reflect feedback received during earlier consultations. They’ve been released in near-final form to give stakeholders early visibility and time to prepare ahead of the final publication expected in October 2025.

UKEB adopts amendments on nature-dependent electricity contracts

In July 2025, the UK Endorsement Board (UKEB) adopted the IASB’s amendments to IFRS 9 and IFRS 7, which:

• clarify the “own-use” exception for contracts to purchase nature-dependent electricity;
• allow hedge accounting in certain cases involving such contracts; and
• introduce new disclosure requirements on their impact on financial performance and cash flows.

The amendments are effective from 1 January 2026, with early application permitted.

UKEB publishes research papers on Statement of Cash Flows

Following the IASB’s launch of a research project on the Statement of Cash Flows and Related Matters, the UKEB has conducted its own research, including stakeholder interviews, a user survey and a review of UK listed companies’ reporting practices. In July, UKEB published four research papers:

• UKEB research paper 1 identifies fundamental concerns with IAS 7 and outlines areas where cash flow reporting may lack clarity or consistency.
• UKEB research paper 2 examines how UK listed companies enhance cash flow reporting through voluntary disclosures beyond the standard requirements.
• UKEB research paper 3 captures insights from investors and preparers on the usefulness, challenges and potential improvements in cash flow statements.
• UKEB research paper 4 offers insights into UK users’ views on potential future directions for the project.

Deferral of IASB’s Fourth Agenda Consultation

To better coordinate standard-setting priorities, the IASB and ISSB have agreed to undertake a joint consultation that reflects the growing interconnectedness between financial and sustainability reporting. This collaborative approach allows stakeholders to consider both boards’ work in a more integrated way and helps ensure that future agenda decisions are aligned and mutually reinforced. As part of this strategy, the IASB has deferred its Request for Information on the Fourth Agenda Consultation from 2025 to 2027. In parallel, the Third Agenda Consultation period, which was originally due to end in 2026, has been extended to 2028 to allow for a concurrent consultation. This revised timeline, supported by both boards and the Due Process Oversight Committee, is intended to improve efficiency and stakeholder engagement across the reporting landscape.

Sustainability reporting

ISSB consults on proposed enhancements to SASB Standards

The ISSB released two exposure drafts proposing updates to the Sustainability Accounting Standards Board (SASB) Standards and related guidance for IFRS S2 Climate-related Disclosures on 3 July 2025. Key proposals include:

• a full review of nine priority industries (eight in Extractives & Minerals Processing and Processed Foods);
• metric alignment across 41 additional industries for topics like Water Management and Workforce Health & Safety; and
• updates to IFRS S2 implementation guidance to maintain consistency with SASB Standards.

These changes aim to improve the relevance, cost-effectiveness and global applicability of sustainability disclosures under ISSB Standards. The exposure drafts are open for comment until 30 November 2025.

ISSB releases guidance on industry-based sustainability disclosures

The IFRS Foundation has published educational material to support companies in applying the ISSB Sustainability Disclosure Standards more effectively by focusing on how to use industry-specific resources, particularly SASB Standards and the implementation guidance for IFRS S2 on climate-related disclosures. The material is designed to support preparers in producing consistent, comparable and decision-useful disclosures, easing the transition to ISSB standards through practical steps and sector-specific examples. 

EFRAG launches consultation on simplified ESRS drafts

At the end of July 2025, EFRAG published revised and simplified Exposure Drafts of the European Sustainability Reporting Standards (ESRS), aiming to make sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) more manageable while maintaining alignment with the European Green Deal. ICAEW responded to  EFRAG’s earlier call for input on revising the ESRS.

Key changes include:

• 57% reduction in mandatory datapoints;
• 68% reduction in total disclosures;
• streamlined double materiality assessment, clearer language, and removal of voluntary disclosures; and
• new relief mechanisms for cost or effort burdens.

The public consultation closed for comment on 29 September 2025, with EFRAG due to provide its final advice to the European Commission by 30 November 2025.

UK GAAP

FRC clarifies related party disclosures for small UK entities

The Financial Reporting Council (FRC) has clarified FRS 102 requirements for disclosure of related party transactions by UK small entities, following the issue of the 2024 Periodic Review Amendments. From 1 January 2026, small entities applying the revised Section 1A of FRS 102 must apply paragraphs 33.9 and 33.14 when disclosing related party transactions, but are not specifically required to apply paragraph 33.7, which relates to key management personnel compensation. While disclosure of directors’ pay is not explicitly required, it may still be necessary to present a true and fair view under the Companies Act 2006. Read this insights article for more details.

FRS 102 amendments to adapted formats

The FRC published FRED 87: Draft Amendments to FRS 102 - Adapted formats on 17 July 2025, proposing updates to ensure FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland remains aligned with recent changes to IFRS Accounting Standards, specifically regarding adapted formats for the balance sheet and profit and loss account. The amendments apply only to entities choosing to use adapted formats. 

The consultation closes on 10 October 2025.

FRC issues new factsheets to support FRS 102 application

The FRC released two new factsheets in September 2025 to aid entities applying FRS 102. Factsheet 12 clarifies presentation options for financial statements, including statutory and adapted formats for the balance sheet and profit and loss account, and aligns with the ongoing consultation on FRED 87. Factsheet 13 provides practical guidance for small companies and micro-entities on assessing and disclosing the going concern basis of accounting. This latter factsheet was produced in response to feedback received when the FRC consulted on updates to its Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks).  

UK regulation for company accounts

Update on changes to filing requirements

On its Changes to UK company law web pages, Companies House has indicated that from 1 April 2027 all companies, including those filing dormant accounts, must submit accounts using commercial software, as paper and web-based filing routes will be closed. Small and micro-entities will also be required to file their profit and loss account, and the option to file abridged accounts will be removed. 

Other

FRC’s Annual Review of Corporate Reporting 2024/25

The FRC published their Annual Review of Corporate Reporting 2024/25 at the end of September. It was found that the quality of corporate reporting by FTSE 350 companies had been maintained, with fewer queries and restatements than in previous years. While impairment remains the most frequently raised issue with companies, no related restatements were required. Challenges persist around cash flow statements and the consistency of information throughout the annual report, highlighting the importance of robust pre-issuance reviews. A quality gap remains between FTSE 350 firms and others, prompting the FRC to undertake a thematic review of reporting by smaller UK listed companies. For the 2025/26 reporting season, the FRC urges clearer disclosures of significant judgements and estimates, including disclosure of key inputs and assumptions.

Read ICAEW's guide, Judgements and estimates. 

FRC’s draft 2026 taxonomy suite

In July 2025, the FRC released a draft of the 2026 Taxonomy Suite which was open for comment until 10 September 2025. The taxonomy defines digital tags for financial data in electronic reports. Key proposed updates include changes reflecting amendments to IFRS 7 and FRED 85 Draft amendments to FRS 101 Reduced Disclosure Framework – 2023/24 cycle, enhanced revenue disaggregation options, improved audit report disclosures and major revisions to the Charities Taxonomy aligned with the proposed 2026 Charities SORP. 

The final version is expected in November 2025, alongside a feedback statement.