A Common Language Containing Differentiating Meanings Within Evolving International Standards for Sustainability Disclosure in Financial Statements: IFRS Foundation 2025 Annual Report—Fit for the Future

 

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The International Financial Reporting Standards (IFRS) Foundation has released its IFRS Foundation 2025 Annual Report—Fit for the Future (31 March 2026).The IFRS Foundation described itself and the report as follows:

The IFRS Foundation is an independent, not-for-profit organisation created in 2001 to develop—in the public interest—high-quality, understandable, enforceable and globally accepted standards for financial reporting, and to promote and facilitate their adoption. Our objectives are set out in the IFRS Foundation Constitution.
The Standards—IFRS® Accounting Standards and IFRS® Sustainability Disclosure Standards—are collectively referred to as IFRS® Standards. They are set by the Foundation’s two independent standard-setting boards, the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB), using a rigorous, inclusive and transparent due process. (Report, p. 3).

A focus of the 2025 Report was on ISSB efforts to support jurisdictions that adopt and/or using its stabdards and on the further elaboration of those standards as a function of the IFRS Foundation mission. 

In 2025 the Foundation continued to support the development, maintenance and adoption of high-quality global standards. The IASB advanced key accounting projects, notably issuing revised versions of the IFRS for SMEs Accounting Standard and Practice Statement 1 Management Commentary and new guidance on disclosing uncertainties in the financial statements and hyperinflationary translation. It also consulted on a new risk mitigation accounting model. The ISSB supported jurisdictions adopting and using IFRS Sustainability Disclosure Standards, clarified aspects of IFRS S2 Climate-related Disclosures, continued enhancing the SASB Standards and progressed its research projects on Human Capital and Nature-related Disclosures. (Web Report Press Release)

That mission was summarized in the 2025 Report:

 Our mission is to develop IFRS Standards that bring transparency, accountability and efficiency to capital markets around the world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.
Both the IASB and the ISSB focus on the needs of investors by requiring companies to disclose financially material information— that is, information that, if omitted, is stated or obscured, could reasonably be expected to influence investment decisions. This concept aims to ensure that financial reports are decision-useful and free from unnecessary detail. (Report, p. 4).

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Of course many of these terms are value laden; for example "fostering trust, growth and long-term financial stability." One might foster trust through social credit systems as well as by disclosure systems. Growth is itself subject to contextually important cultural and structural values and realities. While under a global convergence cognitive fundamental framework one might be able to speak to uniformity of factors indicating growth, and a singular normative template against which it would be assessed, that may no longer be the case. The signification of trust as well as of growth may no longer be entirely amenable to convergence. Not that the concepts will fracture entirely in incompatible forms, but the extent of variation and approaches, and the fundamental differences in the normative ordering from which their value (their signification) arises, may substantially affect both the application of values (for assessment) across variation, and the possibility of a uniformity of interpretation substantial enough to permit comparison (across systems) at a minimum. What is left, then, are the terms--objects the values of which may not align, and interpretations of which may no longer permit simple comparative analytics--much less assessment of interpenetrations, transactions, and choices among, within, and between these differentiable significated "families."

But then so are the objectives: to bring "transparency, accountability and efficiency to capital markets around the world." At the beginning of the century one could understand it almost solely on the basis of the fundamental presumption of the orthodox cognitive view of the time--the need for a global language and discipline of disclosure in the operation of business, that is, the adoption of a single language around which one could understand the operations of an enterprise in financial terms and as a function of the relationship between operational performance and risk.  That single language was then meant to embed a single set of normative meanings that then served to signify the language used, and thus signified to be able to produce a single point of globally collective consensus around the interpretation (normative) of the values embedded in (signified by) the key terms around which that language would now develop--transparency, accountability, and efficiency.

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By the start of the second quarter of the 21st century, however, the common language, like written Chinese, covered a wide variation in how it would be "spoken" and the signification with which common use terms would be infused. take transparency, for example. Within the cognitive cages of early 21st century convergence globalization transparency could be read broadly to require disclosure of virtually everything but trade secrets and protected know how--and even that might require some disclosure as a function, for example of its connection with adverse human rights or sustainability impacts (as these terms were to be developed by international institutions through hard and soft measures, norms, declarations, finds, etc.)--subject to increasingly narrowed exceptions for national security, development and the like. A quarter century later, transparency remains a presumption but now much more tightly constrained and perhaps sieved through superior obligations (many generated through domestic legal orders of States) respecting, national security, sanctions, data protection and data sovereignty, anti-espionage statutes, and blocking legislation to counter extraterritorial projections of regulatory systems. Transparency remains the same; its signification is now fractured and defined as a function of higher ranking signified principles, rules, and expectations. The same applies, with substantially more bite, to the construction and deployment of the concept of "risk." 

One can then, and with enthusiasm, embrace a common language, while at the same time investing that language with regional or other contextual meaning, and constrain it through higher order local values, especially those encased in domestic (or regional) rules and legislation. The imaginaries of unity are preserved, and, indeed, a platform within which such values and contestations of values, may be produced and consumed,  without enforcing a centralizing fundamental political or normative line. Yet that also is a step forward. A single language encasing difference may not have been the goal at the start of the 21st century, but language binds all the same--it binds enough that difference may be constrained by the outer boundaries of rational learning inside a cognitive cage that through its language objects effectively defines both that rationality and its limits. And it is that common language that provides all that is necessary to achieve the fundamentally critical element of this project: comparability and communication across and despite of difference. The rest might come later; or it might not. That convergence is no longer necessary where a common language has been substituted for common norms, beliefs, practices, and expectations. 

It is with that in mind that one might assess the Report's summary of annual accomplishments:

IFRS Foundation: "Successfully initiated an organisational restructure to improve effectiveness and deliver efficiencies as part of an ongoing transformation programme focused on increasing income, reducing costs and strengthening leadership capacity in central functions."

IASB: "• Made substantial progress on the work plan and delivered decision-useful financialreporting outcomes for stakeholders, including a major update to the IFRS for SMEs Accounting Standard, which is used in 85 jurisdictions, completion of the revised
IFRS Practice Statement 1 Management Commentary and amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures. • Reached a significant milestone with the proposed risk mitigation accounting model, which seeks to address a gap in how interest rate risk—one of the most important risks that financial institutions manage—is reflected in financial statements. • Responded to reporting challenges through engagement and targeted guidance, publishing illustrative examples on how to disclose uncertainties in the financial statements and issuing amendments to clarify how companies should translate financial statements from a non-hyperinflationary currency into a hyperinflationary one."  

ISSB: "• Assisted 40 jurisdictions in adopting or otherwise using IFRS Sustainability Disclosure Standards by providing targeted tools and guidance for regulators—including the Jurisdictional Roadmap Development Tool and Jurisdictional Rationale materials—and publishing profiles and snapshots to give stakeholders a clear view of jurisdictional adoption progress. • Supported consistent application of IFRS Sustainability Disclosure Standards by delivering educational materials, issuing clarifications to IFRS S2 Climate-related Disclosures and engaging with stakeholders, and supported interoperability and efficient disclosures by working with other standard-setters. • Published an exposure draft on a comprehensive review to enhance SASB Standards, advanced research on human capital disclosures and moved
from research to standard-setting in the project on nature-related risks and opportunities, with a plan to consult on proposed requirements in 2026." (Report, p. 6).

The Summary of the Report follows below along with the Trustee Chair's Statement.

 

31 March 2026

IFRS Foundation publishes 2025 Annual Report—Fit for the future

The IFRS Foundation has today published its annual report and audited financial statements for the year ended 31 December 2025, setting out its financial results, the progress made in delivering its public‑interest mission and the steps taken to ensure the organisation is fit for the future.

The report highlights continued progress in 2025 through the work of the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB). It also outlines the Foundation’s priorities for 2026.

Financial results

The Foundation reported total comprehensive income of £1.3 million for the year, increasing reserves to £49.2 million. The results reflect the impact of the cost-reduction programme, continued cost management and fiscal discipline, as well as several one-off factors. These factors include the timing of some jurisdictional contributions and lower-than-expected spending on technology projects and recruitment, which have been deferred to 2026.

This year’s report includes a breakdown of expenses by board to provide increased transparency to stakeholders on how resources are allocated within the Foundation.

Advancing the public-interest mission

In 2025 the Foundation continued to support the development, maintenance and adoption of high-quality global standards. The IASB advanced key accounting projects, notably issuing revised versions of the IFRS for SMEs Accounting Standard and Practice Statement 1 Management Commentary and new guidance on disclosing uncertainties in the financial statements and hyperinflationary translation. It also consulted on a new risk mitigation accounting model. The ISSB supported jurisdictions adopting and using IFRS Sustainability Disclosure Standards, clarified aspects of IFRS S2 Climate-related Disclosures, continued enhancing the SASB Standards and progressed its research projects on Human Capital and Nature-related Disclosures.

Both boards focus on meeting investors’ needs for financially material information. Their Standards complement each other but need not be applied together.

Fit for the future

The annual report outlines the transformation programme that was started in 2024 to improve the Foundation’s efficiency and secure appropriate long-term resourcing, ensuring alignment between stakeholder ambitions and the human and financial resources required to deliver them. Initiatives include organisational restructuring, a cost review to reduce staff and governance costs, strengthened income-generation efforts and initial work to refresh the Foundation’s medium- to long-term strategy.

The Trustees remain committed to ensuring the Foundation continues to deliver on its mission and will oversee the progress of the transformation programme in 2026 and beyond with a focus on efficiency, technical capacity, cost management and sustainable funding. They will also continue to engage with jurisdictions to ensure that all those using IFRS Standards contribute to the costs of their development.

Erkki Liikanen, Chair of the IFRS Foundation Trustees, said:

I am pleased to report another year of progress in our mission to deliver enhanced transparency, accountability and efficiency for capital markets globally through high-quality accounting and sustainability disclosure standards. As we reflect on 25 years of progress, it is clear that IFRS Standards have become a global public good. We are undertaking the necessary transformational change to ensure the Foundation is fit for the future. I thank all of those within and outside the organisation who have worked so diligently in support of our work.

Access the annual report and read Trustee Chair Erkki Liikanen's statement on the Foundation’s accomplishments and priorities.

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Report from the Chair of the IFRS Foundation Trustees
Fit for the future (p. 7).

 For 25 years the IFRS Foundation has played
a crucial role in the global regulatory framework
by providing reporting standards that enhance
the efficiency of capital markets worldwide.
Our Standards—developed by the International
Accounting Standards Board (IASB) and the
International Sustainability Standards Board
(ISSB)—allow capital to flow freely across
borders and enable companies to operate in
several jurisdictions without incurring undue
reporting costs. They ensure that financial
information is transparent and comparable and
can be trusted by investors. Jurisdictions benefit
from the expertise and global engagement
that underpin our Standards; they can use
the Standards as an ‘off-the-shelf’ solution
that reduces local costs and supports market
oversight by regulators.
While the boards are funded independently and
have separate work plans, both are focused
on developing Standards that meet the needs
of investors for financially material information.
The two sets of Standards need not be applied
together. However, when used in combination
they complement each other, offering investors
a more comprehensive and decision-useful
package of information.
Significant progress
Prevailing economic conditions—characterised
by slow global growth, persistent inflation and
rising fragmentation of global markets—bring
increasing uncertainty for investors and make
clear, comparable global reporting more vital
than ever.
In developing and issuing IFRS Accounting
Standards, the IASB has produced a global
public good that is critical for capital markets
and investors. The IASB’s focus remains on
maintaining these Standards and supporting
the more than 140 jurisdictions that require
companies to apply them.
One of the IASB’s major objectives in 2025 has
been to complete the large number of projects
on its work plan, ensuring that the Standards
remain robust and up to date. It has delivered
strongly on this objective. I commend the IASB
for its diligent and sustained efforts over several
years in working through a complex and
demanding programme of projects.
The ISSB is at an earlier stage in its life
cycle. It is currently focused on supporting
jurisdictions and market participants in
adopting and implementing its global baseline
of sustainability disclosures for the capital
markets. To date, 40 jurisdictions are on
the path to adopting or otherwise using the
ISSB’s Standards.
In 2025 the ISSB published a broad range of
resources for regulators considering adoption
and for companies seeking practical guidance
on applying the ISSB’s requirements.
The boards’ work represents a significant
advance in enhancing companies’ reporting
to the capital markets and, in doing so, meeting
investors’ information needs. The reports from
the Chairs of the IASB and the ISSB on pages
10 and 14 summarise their progress throughout
the year and their priorities for 2026.
Funding and finances
The long-term success of IFRS Standards
depends on sustainable and predictable
contributions from all those benefiting from
the Standards. Securing this support is
essential to ensuring that the Foundation
can continue to protect, strengthen and further
develop the global public good represented
by IFRS Standards.