[Global Financial Insights] IASB and ISSB Release Key September 2025 Updates

[2025] 179 taxmann.com 6 (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. IASB and ISSB publish September 2025 updates

The IASB and ISSB have released their September 2025 Updates. The IASB report highlights progress on the Equity Method project, work on Financial Instruments with Characteristics of Equity, and updates to its work plan. The ISSB update covers education material on anticipated financial effects, consultation on SASB amendments, proposed IFRS S2 disclosure changes, biodiversity research, and membership updates. Both updates are available online.

Source- International Financial Reporting Standards

Source – International Financial Reporting Standards

2. FASB issues accounting standards update on derivatives scope refinements and share-based consideration

The Financial Accounting Standards Board (FASB) has issued a new Accounting Standards Update (ASU) to refine the application of derivative accounting and address diversity in reporting share-based noncash consideration. The update introduces a scope exception under Topic 815 (Derivatives and Hedging) for certain contracts with features tied to the operations or activities of one of the parties, reducing complexity, costs, and inconsistencies in practice. It also clarifies how Topic 606 (Revenue from Contracts with Customers) interacts with other standards when companies receive share-based noncash consideration, such as warrants or shares, for the transfer of goods or services. These changes are aimed at improving financial statement transparency, ensuring more consistent application, and reducing burdens on preparers and auditors.

Source – Financial Accounting Standards Board

3. FASB seeks comments on proposed guidance for paid-in-kind dividends on equity-classified preferred stock

The FASB has issued a proposed ASU to provide authoritative guidance on the initial measurement of paid-in-kind (PIK) dividends on equity-classified preferred stock. Currently, U.S. GAAP does not address this issue, leading to diversity in practice and reduced comparability in financial reporting. The proposed ASU, based on recommendations from the Emerging Issues Task Force (EITF), would require issuers to measure PIK dividends at the stated dividend rate in the preferred stock agreement. Stakeholders are invited to provide comments by October 27, 2025.

Source – Financial Accounting Standards Board

4. FRC launches consultation on revised auditing standards for fraud detection and evaluation of going concern

The UK’s Financial Reporting Council (FRC) has opened a consultation on proposed revisions to ISA (UK) 240 (auditor’s responsibilities relating to fraud) and ISA (UK) 570 (going concern). The updates aim to strengthen fraud detection, improve risk assessments, and enhance transparency, while also reinforcing auditor responsibilities in evaluating company viability. Aligned with recent IAASB revisions, the proposals maintain equivalence with international standards and preserve UK-specific requirements. The consultation is open until 16 January 2026, with the revised standards effective for audits of periods beginning on or after 15 December 2026.

Source – Financial Accounting Standards Board

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