A joint research report by the AASB, MASB and CPA Australia has identified calls for standardised international guidance on sustainability reporting and cryptocurrencies.

The Australian Accounting Standards Board (AASB), Malaysian Accounting Standards Board (MASB) and CPA Australia have surveyed accounting professionals to better understand their priorities in the ongoing development of international accounting standards.

Their report comes ahead of the International Accounting Standards Board (IASB)’s Fourth Agenda Consultation, which is set to determine its technical strategy and work plan integral to international accounting standards.

“The IASB plays a crucial role in establishing high-quality, globally accepted accounting standards, and developing and issuing supporting material,” the joint report said.

“To ensure these standards remain relevant and responsive to the evolving needs of users of financial statements, the IASB periodically undertakes agenda consultations to gather feedback on potential future projects.

“We have undertaken this crucial exercise to understand stakeholder priorities, so that we can inform the IASB in the development of its Fourth Agenda Consultation.”

Introducing more detailed operating segment reporting, standardised pollutant pricing mechanisms (PPMs) and re-examining the development of a cryptocurrency accounting standard are among the key reform priorities for accountants, the research report revealed.

Over half (56 per cent) supported the inclusion of a project on PPMs in the IASB’s Fourth Agenda Consultation. The report identified climate change impacts, emerging regulations and increasing investor interest as key reasons for the IASB to provide clearer guidance on this issue.

This was driven by the increasing relevance of climate-related financial disclosures and evolving regulatory frameworks, such as Australia’s incoming mandatory climate-related financial disclosure regime.

Accountants also called for enhanced integration of financial and sustainability reporting through greater connectivity between the IASB and International Sustainability Standards Board (ISSB). They believed that this would ensure a more cohesive view of financial and sustainability standards.

“This reflects a clear demand for a holistic approach to disclosures on entity performance, where financial and sustainability data are seamlessly linked,” the joint report said.

Respondents called for clearer guidance on incorporating ESG impacts, standardising climate risk reporting and accounting for sustainability-linked investments. They called for more educational resources, clearer materiality guidance specifically addressing future, large-impact climate risks and opportunities, and simplified reporting requirements.

They also highlighted a need for clear standards or guidance on cryptocurrencies, which are not currently specifically catered for in International Financial Reporting Standards (IFRS).

Current guidance from the IASB has noted that cryptocurrencies generally don’t meet the definition of financial instruments, and instead are treated as inventories or intangible assets.

A majority (69 per cent) of accounting professionals said that the IASB should include a project on cryptocurrencies in its future work plan, in order to solidify accounting standards in that area.

“Respondents expressed concerns about the rapid growth of cryptocurrencies, emphasising the need for clear and consistent accounting standards to manage and report these assets,” the report said.

Overall, the survey found that there was notable support for the IASB to revisit projects on its ‘reserve list,’ including projects on both operating segments and PPMs.

This was accompanied by significant interest in re-examining high-priority items such as cryptocurrency standards, as well as a desire for greater connectivity between the IASB and ISSB on sustainability standards.