Since 2004, Insights into IFRS has been our flagship publication, helping its readers to apply IFRS Accounting Standards by drawing on real-life experience of applying them around the world. As the standards are principles-based, much of the work that goes into writing Insights involves interpreting these principles and using examples to show how they might be applied to specific situations. Essentially, where the standards are concerned, it is KPMG’s best thinking on how to apply them in practice.
This year Insights runs to over 3,000 pages, fully digitised. Its content expands with every new edition to reflect changes in the financial reporting landscape and emerging issues, and our experience in applying them. And that’s not surprising when we look back over the changes we’ve seen in its first 20 years.
Responding to an increasingly complex world
When Insights began 20 years ago, the business world and financial reporting standards were far less complex than they are today. But as the business world has innovated, financial reporting has had to keep up. For example, the introduction of mobile phone bundles and customer loyalty schemes during that period triggered new revenue accounting requirements. And the financial crisis in 2008 led to an overhaul of the way banks account for their loans.
A myriad of financial reporting implications continue to be triggered by today’s pressing issues, including for example reporting on climate and emissions schemes as well as the impact of technology, geopolitical events, inflation and economic uncertainty.
As the accounting requirements have grown, so has our drafting team. Today, it numbers over 100 specialists across the globe with the shared objective of providing helpful guidance to companies and encouraging consistent application of the standards, whatever uncertainties those companies may face.
Telling a connected story
Given all the uncertainty and challenges in today’s environment, it is not surprising that investors require more and more detailed information about a company. In addition to the financial statements, they look to the rest of the annual report for an analysis of how the company is responding to emerging issues.
Today, a vast group of stakeholders beyond investors read corporate reports including customers, competitors, regulators, current and potential employees, pressure groups and anyone else who clicks on to the company website to find information. These readers may not be skilled in financial analysis, but they still expect to find what they need in the annual report.
These readers will benefit from – and expect to see – a consistent and coherent narrative, from the front of the annual report through to the financial statements at the back. They will want to see consistency in the explanations that the company provides on the issues it faces, whether they look to the financial statements or the rest of the annual report. Standard setters are alert to these changing expectations, so we can expect to see more developments to enhance connectivity across the annual report.
Going forward
Among today’s major issues are ESG and sustainability reporting.
In response, international, European and US standards setters are developing new requirements for sustainability disclosures to provide the information that users need in a consistent and comparable manner.
These developments are bringing the same rigour to sustainability reporting as there is to financial reporting. We’re already building our technical guidance for sustainability reporting, starting with our detailed guidance on the first two IFRS Sustainability Disclosure Standards. Our expanded teams are publishing new insights and interpretations for these new standards as they are developed.
Going forward, on IFRS Standards, our practical guidance will cover not just the accounting but also the sustainability disclosure standards and cross-cutting issues such as emissions and carbon credits.
We’re excited to be moving into this new era of more connected reporting – and our Insights will continue to provide helpful guidance at every step.
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