Defining moments of corporate reporting in 2023 and beyond

As the curtain falls on 2023, we look back at the defining moments of the corporate reporting landscape and implications for the future. The year 2023 saw financial and non-financial reporting share the stage globally, with consequences for local jurisdictions.

From a financial reporting perspective, the new insurance contract standard, IFRS 17, became effective for annual periods beginning on or after January 1, 2023.

The global application of IFRS 17 will result in better comparability and transparency across insurers locally and globally. Insurers must ensure they educate and engage with their stakeholders on navigating and interpreting their results when presented in 2024. More economies saw their currencies become hyperinflationary in 2023, including African countries.

Hyperinflation accounting implies that entities with these hyperinflationary functional currencies would have to apply the hyperinflation financial reporting standard – IAS 29 to ensure that the financial statements are meaningful by restating the amounts and balances within their financial statements for changes in the general purchasing power of that currency.

On a separate note, while business leaders remain cautiously optimistic about the future, the adverse economic shocks and uncertainty experienced in 2023 remain. Therefore, organisations should approach financial statement disclosures deliberately to ensure they provide users with relevant and valuable information for their decision-making.

From a non-financial reporting and sustainability reporting front, the International Sustainability Standards Board (ISSB) issued its first two standards, IFRS S1 and IFRS S2, in June this year with an effective date of January 1, 2024, subject to local endorsements. It marked a significant milestone for sustainability reporting globally.

It will also result in more organisations preparing sustainability reports, including integrated reports and other ESG-related reports that are comparable and standardised.

In East Africa, regulators have demanded that organisations prepare sustainability reports such as the GRI-compliant sustainability reports for the Nairobi Securities Exchange (NSE) listed entities and the climate-related risk management report for banks by the Central Bank of Kenya.

As more organisations prepare sustainability reports in 2024, there will be an increased demand for verification of claims and representations within these reports, resulting in more internal and external assurance of data and information.

Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics