[Global Financial Insights] Updated FRC Guidance and IFRS/ISSB/IASB Developments

Editorial Team – [2025] 180 taxmann.com 146 (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. Financial Reporting Council issues updated guidance on non-executive director remuneration

To support the corporate governance code 2024, the Financial Reporting Council (FRC) has published updated guidance on the remuneration of the non-executive directors. This updated guidance aims to provide clarity to the company on structuring the remuneration of non-executive directors and encouraging them to build personal shareholdings with shareholders.

As per this guidance, the board may choose to pay non-executive directors a portion of their fees in shares. However, in such cases a description outlining the rationale and process for allowing a portion of non-executive director fees to be paid in shares shall be explained to provide clarity to shareholders.

Further, the boards may also consider the alternative approaches to pay remuneration to independent non-executive directors. In doing so, they should take care to preserve director’s independence. However, it is hereby important to note that, the performance related remuneration is not appropriate, as it may compromise the director’s ability to provide oversight and challenge when considering executive decisions.

Source – Financial Reporting Council

2. Announcement at IFRS Sustainability Symposium – ISSB Standards to facilitate as a global passport

The “International Financial Reporting Standard (IFRS) Symposium” is a global event organised by the IFRS foundation. The symposium serves as a global platform for dialogue on sustainability related financial reporting. It brings together leaders from business, investment, regulation, and standard setting communities to discuss how sustainability disclosure standards are shaping corporate reporting and decision-making worldwide.

In the recent ISSB Symposium, the ISSB chairman announced the significant expansion of the jurisdictional working group. This initiative will facilitate multilateral discussions among regulators on how ISSB standards can serve as a global passport, benefiting capital markets worldwide. The passporting provisions are introduced with an intention of uniformity such that the jurisdictions accepts reports prepared in accordance with the ISSB Standards. This provision shall further lower costs for preparers and reduce frictions in the system to deliver efficiencies and comparable information for capital markets and preparers.

Source – International Financial Reporting Standard

3. International Sustainability Standard Board updates for October 2025

The International Sustainability Standard Board (ISSB) met on 28th October 2025, wherein they discussed about the biodiversity, ecosystem, ecosystem services, human capital and amendments to greenhouse gas emissions disclosures.

• Bio-diversity, Ecosystem and Ecosystem services – The ISSB discussed about the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, metrics and additional guidance. The meeting was held to decide whether the TNFD framework could be used to develop IFRS sustainability disclosure standard. The decision would be taken after considering, whether the matter regarding nature-related risks and opportunities as required by user of general purpose financial reports are met by the TNFD framework or not?
• Human Capital – With regard to human capital, the ISSB held meeting to discuss about the structured approach to analyse, organise, synthesise, and priorities the findings from the initial phase of research. Furthermore, it also discussed about the ways of applying the aforesaid approach to the research project.
• Amendments to greenhouse gas emissions disclosures – The ISSB has tentatively decided to amend the financed emissions metrics in the Asset Management & Custody Activities, Commercial Banking and Insurance SASB Standards. The following amendments are made:

1. 1. The entity applying the aforesaid SASB standards is permitted to exclude greenhouse gas emissions attributable to derivatives, when disclosing financed emissions information. Further, a cross-reference to the definition of ‘financed emissions’ is also added in IFRS S2, Climate Related Disclosures.
   2. The metrics has been amended such that the entity that has excluded greenhouse gas emissions attributable to derivatives would explain what it treated as a derivative for the purpose of applying the relief to enable an understanding of how it applied the relief.

The aforesaid amendments shall be effective for the annual reporting periods beginning on or after 1st January 2027.

Source – International Financial Reporting Standard

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