Global Financial Insights—IFRS S2 and ISSA 5000 Updates

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. IFRS Foundation publishes educational material on GHG emissions disclosure under IFRS S2

On 29 May 2025, the IFRS Foundation released a new set of educational materials designed to support the application of the greenhouse gas (GHG) emissions disclosure requirements under IFRS S2 Climate-related Disclosures. This Q&A-format resource helps entities understand how to measure and disclose their GHG emissions in line with the standard.

The document explains the rationale behind the disclosure of Scope 1, Scope 2, and Scope 3 emissions, highlights how the GHG Protocol standards are incorporated into IFRS S2, and elaborates on specific disclosure and measurement expectations. It categorises the requirements into those related to measurement (e.g. defining organisational boundaries and Scope 3 estimation frameworks) and disclosure (e.g. emission categories and target-related information) to help clarify application.

Importantly, the material does not introduce new requirements or amend existing ones in IFRS S2. Instead, it aims to enhance stakeholder understanding and support consistent implementation. This initiative reflects the ISSB’s ongoing commitment to aiding the global application of its sustainability disclosure standards.

Source – International Financial Reporting Standards

2. FRC launches consultation on UK adoption of ISSA 5000 for sustainability assurance

On May 29, 2025, the UK’s Financial Reporting Council (FRC) initiated a consultation on adopting a UK-specific version of the International Standard on Sustainability Assurance (ISSA) 5000, titled “General Requirements for Sustainability Assurance Engagements.” This proposed standard, ISSA (UK) 5000, is intended for voluntary use by assurance providers, aiming to align with international practices and reduce the burden on firms operating across multiple jurisdictions. It is designed to be profession agnostic, allowing both professional accountants and other assurance practitioners to apply it, provided they meet relevant quality management and ethical requirements.

The FRC’s proposal follows its recent study of the UK sustainability assurance market, where stakeholders expressed support for a clear and internationally consistent assurance framework. The FRC emphasised the importance of establishing a consistent sustainability assurance framework to underpin investor confidence in UK sustainability reporting. It encouraged all interested parties including assurance providers, investors, businesses and sustainability experts to participate in the consultation process.

To assist practitioners in implementing ISSA 5000, the International Auditing and Assurance Standards Board (IAASB) has published an Implementation Guide. This guide offers practical, non-authoritative guidance on conducting assurance engagements in accordance with ISSA 5000, covering fundamental concepts and the conduct of the assurance engagement from acceptance and continuance to reporting. It also discusses key principles and challenges practitioners may encounter in practice.

Stakeholders are invited to submit comments on the proposed ISSA (UK) 5000 by July 31, 2025. The FRC plans to release its next consultations in July 2025.

Source – Financial Reporting Council

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