IASB July 2025 Update | Business Combinations & Cash Flow Focus

[2025] 176 taxmann.com 987(Article)

IASB Reviews Business Combinations, Cash Flows, and Agenda Planning

In its July 2025 meeting, the International Accounting Standards Board (IASB) focused on multiple strategic projects, including updates to Business Combinations, the Statement of Cash Flows, and its future agenda plan. Key discussions centered around auditability concerns and proposed changes to impairment testing of goodwill. While no final decisions were taken on the impairment model, the Board showed support for extending Management Performance Measures (MPM) disclosures to cash flow statements under IAS 7. It was also agreed that the next agenda consultation would commence in 2026, aligning with the International Sustainability Standards Board (ISSB) timeline.

IFRIC Aligns Agenda Decisions with IFRS 18 and Tackles Complex Issues

The IFRS Interpretations Committee (IFRIC), in its June 2025 meeting, made significant progress toward aligning its agenda decisions with the newly issued IFRS 18, effectively replacing outdated references to IAS 1. Nine agenda decisions are proposed for update, ensuring consistency in global application. The Committee also continued deliberations on IFRS 9-related topics such as transaction costs and embedded prepayment options, as well as hyperinflationary accounting under IAS 29. IFRIC has invited public comments to foster transparency and support global convergence in financial reporting interpretations.

ISSB Advances Climate Disclosures and Agenda Consultation for 2026

In July 2025, the ISSB continued its focus on sustainability disclosures and long-term strategic direction. The Board confirmed it would initiate its next agenda consultation in 2026 and began deeper exploration into biodiversity and human capital-related issues. Discussions also touched on enhancing Scope 1–3 emissions disclosures and offering additional guidance on climate transition plans. While these areas remain under active research, no binding decisions have been made yet, and the Board signaled a measured, stakeholder-driven approach to standard-setting in environmental and social topics.

UK TAC Seeks Stakeholder Input on Proposed SASB Amendments

The UK Technical Advisory Committee (TAC), via the Financial Reporting Council (FRC), is soliciting feedback on the ISSB’s proposed amendments to the SASB Standards. These changes aim to increase the global relevance of the SASB framework by aligning with IFRS S1 and S2 and improving consistency across other major reporting frameworks. The proposed revisions span across 50 industries, emphasizing disclosure areas such as emissions, water usage, and labour practices. Stakeholders are encouraged to participate in the consultation process by responding to a detailed 30-question survey by 29 August 2025, enabling more robust sustainability reporting going forward.

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