IFRIC Question: Net Zero Commitments

[exIFRS]

An interesting question has gone to the IFRS Interpretations Committee:

This submission therefore requests that the Interpretations Committee consider the interpretations that:
1. A Net Zero Transition Commitment meets the definition of a constructive obligation under IAS37 paragraphs 10 and 20, and
2. A Net Zero Transition Commitment should be recognised as a provision according to the principles of paragraphs 11-26 of IAS37, and
3. Starting with recognising a provision, the principles and accounting for asset decommissioning should be applied to a strategy and investment program designed to meet a Net Zero Transition Commitment—using the analogy that an entity is committing to decommission its carbon-emitting infrastructure.

https://www.ifrs.org/content/dam/ifrs/g ... tments.pdf

It's certainly a different style of question to that usually received by the IFRIC, having been written by lawyers rather than accountants. I suspect the IFRIC will not be keen to make such a broad determination.

My guess is they will point to the existing standard, say that a company needs to apply the requirements and leave it at that. But it will be interesting to see.

[Marek Muc]

It's going to be an interesting discussion. BTW: https://kpmg.com/xx/en/home/insights/20 ... ias37.html

[JRSB]

I can't quite see it, unless a company commits to offsetting its previous emissions? Not sure if I've seen such a commitment. (if they do, they probably already bought the permits/credits accordingly)