The world of accounting and corporate reporting is constantly evolving. For South African businesses and professionals, staying current with the latest non-tax related Accounting Updates (May 2025) is crucial. These changes, spanning international financial reporting, sustainability disclosures, public sector standards, and audit practices, impact how organisations operate, report, and build stakeholder trust. This overview highlights key developments from April and May 2025 that deserve your attention.
Spotlight on Sustainability & Climate Reporting:
Sustainability and Environmental, Social, and Governance (ESG) factors are increasingly shaping the reporting landscape. These Accounting Updates (May 2025) are vital for businesses to understand investor expectations and regulatory shifts.
ISSB Proposes Refinements to IFRS S2 Climate Disclosures:
The International Sustainability Standards Board (ISSB) is actively working to enhance the global baseline for sustainability disclosures. On April 28, 2025, the ISSB released an Exposure Draft proposing targeted amendments to IFRS S2 Climate-related Disclosures.
These proposed changes aim to ease the application of requirements concerning Greenhouse Gas (GHG) emissions disclosures, without reducing the decision-usefulness of the information for investors. The comment period for this draft is open until June 27, 2025, with final amendments anticipated by the end of 2025. This signifies a responsive approach by the ISSB to feedback as companies globally begin to implement IFRS S1 and S2.
South Africa’s Drive: “Pre-Assurance Readiness” for ESG:
In South Africa, the momentum for robust ESG reporting is building. With the JSE Limited having updated its ESG disclosure guidance to align with IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2, companies are urged to achieve “pre-assurance readiness.”
This involves proactively assessing and strengthening data, systems, and controls for sustainability information before formal external assurance. This drive, highlighted in May 2025 discussions, aims to improve the quality and credibility of ESG reporting. Additionally, the Financial Sector Conduct Authority (FSCA) continues its work on a sustainable finance framework, including consultations on mandatory climate disclosures for larger listed corporates.
GRI Consults on Sector Standard Alignment:
Adding to the global sustainability dialogue, the Global Reporting Initiative (GRI) launched a consultation on May 20, 2025. This initiative proposes changes to its sector-specific standards to ensure alignment with its revised and newly issued topic standards, reflecting the ongoing refinement of sustainability reporting frameworks worldwide.
Key Changes in Financial Reporting Standards (IFRS & Local):
Core financial reporting standards continue to evolve, impacting both private and public sector entities. Keeping track of these Accounting Updates (May 2025) is essential for accurate financial representation.
GRAP 104 (Financial Instruments) Now Effective in SA Public Sector:
A significant development for South African public sector entities is the coming into effect of the revised Standard of Generally Recognised Accounting Practice (GRAP) 104 on Financial Instruments from April 1, 2025. This standard, now aligned with IFRS 9, introduces new requirements for the recognition, measurement, and disclosure of financial instruments.
The Accounting Standards Board (ASB) of South Africa published helpful snapshots in May 2025, detailing key disclosure requirements for GRAP 104. Other GRAP standards also effective from April 1, 2025, include GRAP 103 on Heritage Assets, GRAP 105 and GRAP 106 on Transfer of Functions, and IGRAP 22 on Foreign Currency Translation and Advance Consideration.
(For more, visit the ASB website)
Developments with IFRS 18 and IFRS 19:
The International Accounting Standards Board (IASB) is progressing with major new standards:
- IFRS 18 Presentation and Disclosure in Financial Statements: Discussions continued in April 2025 regarding updates to existing IFRIC agenda decisions to align with IFRS 18. The IFRS Foundation also announced a webcast series on the new IFRS 18 taxonomy, indicating its nearing implementation.
- IFRS 19 Subsidiaries without Public Accountability: Disclosures: For non-publicly accountable entities, EFRAG (European Financial Reporting Advisory Group) published its draft endorsement advice on IFRS 19 in May 2025.This standard aims to simplify disclosure requirements for eligible subsidiaries.
IPSASB ED: Refining “Materiality” in Public Sector Standards:
The International Public Sector Accounting Standards Board (IPSASB) issued an exposure draft on May 20, 2025, proposing revisions to the definition of “material.” This aims to align with other international standards and enhance consistency in public sector financial reporting globally.
IFRIC Clarification: Intangible Assets from Climate-Related Expenditure:
In April 2025, the IASB confirmed it did not object to an IFRIC agenda decision regarding the application of IAS 38 Intangible Assets to expenditure on climate-related activities, such as the acquisition of carbon credits. This provides clarity on accounting for such costs under existing standards.
IAASB’s Revised Going Concern Standard (ISA 570) Progress:
The International Auditing and Assurance Standards Board (IAASB) approved International Standard on Auditing (ISA) 570 (Revised 2024), Going Concern. Publication was anticipated in April 2025 following final certification. This revised standard, effective for audits of financial statements for periods beginning on or after December 15, 2026, aims to promote consistent practice and enhance auditor responsibilities related to going concern assessments.
IRBA Update: Illustrative Auditor’s Reports (SAAPS 3 ED)
In South Africa, the Independent Regulatory Board for Auditors (IRBA) had an exposure draft for proposed revisions to SAAPS 3, Illustrative Reports, with comments closing in mid-April 2025. These revisions incorporate recent changes to the IESBA Code regarding independence disclosures for public interest entities.
IFAC Focus: Revisions to Membership Obligations
The International Federation of Accountants (IFAC) sought public input in April 2025 on proposed revisions to its Statements of Membership Obligations (SMOs). These SMOs form the basis of requirements for its member bodies (like SAICA), impacting professional accountants worldwide. (Consult the IFAC website for more details)
Conclusion
The Accounting Updates (May 2025) highlight a clear trajectory towards more comprehensive sustainability reporting, evolving financial reporting standards tailored for different entities, and a continued focus on audit quality and ethical professional conduct. For non-accounting professionals, understanding the shift towards broader ESG information can influence business strategy and stakeholder engagement. For accounting professionals, adapting to these new and revised standards is key to maintaining professional excellence. These Accounting Updates (May 2025) underscore the dynamic nature of the field, requiring continuous learning and adaptation.
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(Disclaimer: This article provides a general overview of accounting updates and should not be considered as professional advice. Always consult with a qualified professional for advice tailored to your specific circumstances.)