Illustrative examples of disclosures about uncertainties in the financial statements

The International Accounting Standards Board (IASB) has issued illustrative examples demonstrating how Tier 1 and Tier 2 for-profit entities can apply IFRS Accounting Standards when reporting the effects of uncertainties in their financial statements. The examples use climate-related scenarios as practical illustrations but apply to all uncertainties.

As accompanying materials to IFRS Accounting Standards, these illustrative examples are non-authoritative and do not have an effective date. However, companies are expected to implement any change in their reporting on a timely basis as they complete their year-end reporting.

Why are these illustrative examples needed?

Stakeholders noted that the information companies provide about the effects of uncertainties is sometimes insufficient or appears inconsistent with the information provided outside their financial statements.

These illustrative examples were developed to provide practical insights to support clearer and more consistent application of existing NZ IFRS Accounting Standards, including:

• NZ IFRS 7 Financial Instruments: Disclosures
• NZ IFRS 18 Presentation and Disclosure in Financial Statements
• NZ IAS 1 Presentation of Financial Statements
• NZ IAS 8 Basis of Preparation of Financial Statements
• NZ IAS 36 Impairment of Assets
• NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Entities should look to these examples when considering the reporting of their own uncertainties (including climate-related uncertainties), as these illustrative examples demonstrate the application of existing disclosure requirements.

A near-final staff draft of the illustrative examples was published in July 2025. This final version differs from the near-final draft only in minor editorial details.

*Additional Material is restricted to those with NZ-assigned IP addresses only.