As of February 2025, several significant updates have been made to the International Financial Reporting Standards (IFRS)

 

As of February 2025, several significant updates have been made to the International Financial Reporting Standards (IFRS):

**1. Third Edition of the IFRS for SMEs Accounting Standard**

The International Accounting Standards Board (IASB) is set to release the third edition of the IFRS for SMEs Accounting Standard in February 2025. This edition aligns the revenue recognition requirements for small and medium-sized enterprises (SMEs) with the principles of IFRS 15, "Revenue from Contracts with Customers." The revised Section 23, now titled "Revenue from Contracts with Customers," introduces a five-step model for revenue recognition, tailored to the simpler nature of SME transactions. The IASB has simplified the language and reduced the judgment required to make it more accessible for SMEs. citeturn0search0

**2. Amendments to IAS 21: Lack of Exchangeability**

In August 2023, the IASB issued amendments to IAS 21, "The Effects of Changes in Foreign Exchange Rates," addressing situations where a currency is not exchangeable. Effective from January 1, 2025, these amendments provide a consistent approach for entities to assess exchangeability and determine the appropriate exchange rate when a currency lacks exchangeability. This ensures more reliable and comparable financial reporting in such circumstances. citeturn0search2

**3. Updates to IFRS Practice Statement 1: Management Commentary**

The IASB has been refining its proposals for a revised IFRS Practice Statement 1, "Management Commentary." Discussions in late 2024 focused on simplifying disclosure objectives, aligning definitions of material information with the Conceptual Framework, and acknowledging the inclusion of governance-related matters in management commentary. These updates aim to enhance the usefulness and clarity of management commentary for stakeholders. citeturn0search4

**4. Publication of "Navigating the Changes to IFRS 2025"**

Grant Thornton released the "Navigating the Changes to IFRS 2025" publication in January 2025. This document provides a high-level overview of recent changes to IFRS, including new standards, interpretations, and amendments issued between January 1, 2024, and December 31, 2024. It serves as a valuable resource for preparers and reviewers of IFRS financial statements, helping them stay informed about the latest developments and their effective dates. citeturn0search1

**5. Sustainability Reporting Standards**

Following the conclusions of COP 29 in Baku, there is an increased emphasis on sustainability reporting. New standards, such as IFRS S2 and IFRS S1, are being introduced to enhance transparency and accountability in environmental, social, and governance (ESG) reporting. These standards require companies to disclose detailed sustainability-related risks and opportunities affecting their finances, aiming to eliminate superficial "greenwashing" practices. While implementation may pose challenges, these standards represent a significant step toward comprehensive corporate responsibility. citeturn0news10

These developments reflect the IASB's ongoing commitment to enhancing the clarity, consistency, and relevance of financial reporting standards globally.