Editorial Team – [2025] 181 taxmann.com 586 (Article)
Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:
1. ISSB Issues Amendments to Greenhouse Gas Emissions Disclosure Requirements in IFRS S2
The International Sustainability Standards Board (ISSB) has issued targeted amendments to the greenhouse gas emissions. The amendments relates to the disclosure requirements in IFRS S2, Climate-related Disclosures to address application challenges identified during initial implementation. Based on stakeholder feedback, the amendments provide practical reliefs and clarifications to support companies in while applying the standard. Further, it also focuses on maintaining investor information needs and minimising disruption for jurisdictions adopting ISSB Standards. Following are the targeted amendments issued by ISSB:
(a) An entity is permitted to restrict the measurement and disclosure of “Scope 3 Category 15” greenhouse gas emissions to financed emissions, as defined in IFRS S2.
(b) Allow the use of alternative classification systems.
(c) Further, it introduces a jurisdictional relief from using global warming potential values from the latest “IPCC Assessment Report” for converting greenhouse gas emissions
Source – International Financial Reporting Standard
2. Financial Reporting Council Initiates Investigation on Audit Firm Over Non-Compliance Relating to Partner’s Rotation
Financial Reporting Council (FRC) has initiated an investigation against an audit firm in relation to the statutory audit of the consolidated financial statements of a company for the financial year ended 31st December 2024. The investigation follows an announcement made by the company to the London Stock Exchange on 2nd July 2025, in which the audit firm reported non-compliance with audit partner rotation requirements, including breaches of the prescribed time limits under the “UK FRC’s Revised Ethical Standard”.
The scope of the investigation includes consideration of whether relevant ethical and regulatory requirements relating to audit partner rotation have been breached. The investigation will be carried out by the FRC’s Enforcement Division in accordance with the Audit Enforcement Procedure (AEP).
Source – Financial Reporting Council
3. Financial Accounting Standard Board issues taxonomies for 2026
Financial Accounting Standards Board (FASB) has announced the release of its 2026 taxonomies. The said taxonomy includes the GAAP Financial Reporting Taxonomy (GRT), SEC Reporting Taxonomy (SRT), and GAAP Employee Benefit Plan Taxonomy (EBPT). Further, the release also includes the 2026 DQC Rules Taxonomy (DQCRT) and the GAAP Meta Model Relationships Taxonomy (MMT). These taxonomies are collectively referred to as the “FASB Taxonomies”. The development in the taxonomies are discussed herewith:
(a) The 2026 GRT incorporates updates reflecting FASB accounting standards issued in 2025 prior to 1st December 2025, along with other recommended improvements.
(b) The 2026 SRT includes enhancements for commonly used reporting elements not explicitly specified under GAAP.
(c) The DQCRT provides a selected set of data validation rules developed by the “XBRL US Data Quality Committee”, primarily for regulatory use.
(d) The MMT is designed to support preparers in identifying the proper elements for tagging their filings, assist data users in data usability and assist rule developers by the development of business rules through additional relationship information.
Source – Financial Accounting Standard Board
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