It is here.

Two newest standards, IFRS S1 and IFRS S2, were published in June 2023.

I think that’s not news for anybody with two eyes and ears, because the information spread everywhere.

Well, my usual approach is rather practical, so I will skip all these talks about WHY we need sustainability and WHY it is good. We all know that already.

So let’s focus on practical questions:

#1 When should we all apply IFRS S1 and IFRS S2?

Both standards are mandatorily applicable for annual reporting periods beginning on or after 1 January 2024.

It practically means that you need to have the appropriate processes in place to monitor and gather all the data you need to provide, so that you can actually start gather the data from 1 January 2024.

Therefore, the first report with incorporating information related to IFRS S1 and IFRS S2 will be published sometime in 2025, related to the year 2024.

#2 What about comparatives?

The good news is that NO, you do not have to present comparative information in the first annual financial statements, that would be related to the period before the date of initial application.

So no worries about monitoring and gathering data in 2023.

Special For You! Have you already checked out the  IFRS Kit ? It’s a full IFRS learning package with more than 40 hours of private video tutorials, more than 140 IFRS case studies solved in Excel, more than 180 pages of handouts and many bonuses included. If you take action today and subscribe to the IFRS Kit, you’ll get it at discount! Click here to check it out!

Of course, if you do that voluntarily, that’s OK, you can present it.

#3 Can you apply sustainability standards earlier than in 2024?

Yes, of course, provided that you apply both of them at the same time.

#4 Is there any relief in reporting?

Yes, a bit.

You need to provide the disclosures on climate-related risks in the first place, in accordance with IFRS S2.

If you cannot disclose all the related disclosures in accordance with IFRS S1, then you do not need to do so, but only in the first annual reporting period when you apply the standards.

However, in these first annual financial statements with sustainability disclosures, you need to disclose the climate-related disclosures at minimum and then also state that you applied transition relief.

Any questions? Please leave me a comment below, thank you!