Contingency and Double materiality assessment: Difference between pages

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1. ''Financial reporting - business planning.''
''Financial reporting - risk management - ESG - sustainability reporting - European Sustainability Reporting Standards (ESRS).''


Broadly, any uncertain future event.
In the context of sustainability reporting, a double materiality assessment is one that covers material information about both:


:(1) A reporting entity's impact on people or the environment ("impact materiality") and


2. ''Financial reporting - IAS 37.''
:(2) Financial risks or opportunities relating to a sustainability matter ("financial materiality").


For financial reporting purposes, IAS 37 defines a contingent liability by reference to the occurrence - or non-occurrence - of uncertain events not wholly within the control of the entity.


IAS 37 defines a contingent asset in a similar way.
For reporting purposes, a matter is material if it falls into either of these categories.




3. ''Business planning.''
:<span style="color:#4B0082">'''''The European Sustainability Reporting Standards (ESRS) approach to materiality'''''</span>


An uncertain future event.
:"The ESRS require that the sustainability statement include sustainability information related to material IROs identified through a materiality assessment process that applies the principles of double materiality...


Usually - but not always - one that is expected to have a negative impact if it were to occur.
:The terms ‘material’ and ‘materiality’ are used throughout the ESRS to refer to double materiality unless otherwise specified."


:''EFRAG Implementation Guidance - Materiality Assessment - p9.''


4. ''Financial management.''


An amount of money set aside to deal with the potential negative impact of an uncertain future event.
== See also ==
 
* [[Double materiality]]
 
* [[Environmental, social and governance]] (ESG)
 
* [[European Financial Reporting Advisory Group]] (EFRAG)
4. ''Financial management.''
* [[European Sustainability Reporting Standards]]  (ESRS)
 
* [[Financial materiality]]
An amount of money set aside to deal with the potential negative impact of an uncertain future event.
 
 
5. ''Cash management - treasury - tokenisation - central bank digital currency (CBDC) - distributed ledger - platforms - programmability.''
 
In the context of programmability, contingency is the ability to write and input code that enables the performance of actions, contingent on other actions having been completed, or other important conditions being present.
 
 
:<span style="color:#4B0082">'''''Benefits of programmability & contingency'''''</span>
 
:"Tokenisation – the process of recording claims on financial or real assets that exist on a traditional ledger on a programmable platform – introduces two important capabilities.
 
:First, by dispensing with messaging and the reliance on account managers to update records, it provides greater scope for composability, whereby several actions are bundled into one executable package.
 
:Second, it enables the contingent performance of actions through smart contracts, ie logical statements such as “if, then, or else”.
 
 
:By combining composability and contingency, tokenisation makes the conditional performance of actions more readily attainable, even quite complex ones...
 
:Moreover, programmability allows new types of contingent payment, while certain policy measures (eg capital controls) can be built in from the start."
 
:''Bank for International Settlements (BIS) Annual Economic Report 2023, pages 89 & 91.''
 
 
==See also==
* [[Bank for International Settlements]]  (BIS)
*[[Business contingency management]]
*[[Business continuity plan]]
* [[Cash management]]
* [[Central bank digital currency]] (CBDC)
* [[Code]]
* [[Composability]]
* [[Contingency plan]]
* [[Contingent]]
* [[Contingent assets]]
* [[Contingent capital]]
* [[Contingent convertible capital]]
* [[Contingent covenant]]
* [[Contingent item]]
* [[Contingent liabilities]]
* [[Contingent risk]]
* [[Contingent Term Repo Facility]]  (CTRF)
* [[Deal contingent forward]]
* [[Distributed ledger]]
* [[Financial reporting]]
* [[Financial reporting]]
* [[IAS 37]]
* [[Guidance]]
* [[Payment]]
* [[Immaterial]]
* [[Platform]]
* [[Impact]]
* [[Programmability]]
* [[Impact materiality]]
* [[Reserves]]
* [[Material by nature]]
* [[Tokenise]]
* [[Materiality]]
* [[Materiality assessment]]  (MA)
* [[Risk]]
* [[Risk management]]
* [[Sustainability]]
* [[Sustainability reporting]]
* [[Sustainability statement]]




==Other resource==
==Other resource==
*[https://www.bis.org/publ/arpdf/ar2023e3.pdf Bank for International Settlements (BIS) Annual Economic Report 2023]
*[https://www.efrag.org/Assets/Download?assetUrl=/sites/webpublishing/SiteAssets/IG+1+Materiality+Assessment_final.pdf EFRAG Implementation Guidance - Materiality Assessment]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Identify_and_assess_risks]]
[[Category:Financial_risk_management]]
[[Category:Manage_risks]]
[[Category:The_business_context]]

Latest revision as of 14:10, 3 August 2024

Financial reporting - risk management - ESG - sustainability reporting - European Sustainability Reporting Standards (ESRS).

In the context of sustainability reporting, a double materiality assessment is one that covers material information about both:

(1) A reporting entity's impact on people or the environment ("impact materiality") and
(2) Financial risks or opportunities relating to a sustainability matter ("financial materiality").


For reporting purposes, a matter is material if it falls into either of these categories.


The European Sustainability Reporting Standards (ESRS) approach to materiality
"The ESRS require that the sustainability statement include sustainability information related to material IROs identified through a materiality assessment process that applies the principles of double materiality...
The terms ‘material’ and ‘materiality’ are used throughout the ESRS to refer to double materiality unless otherwise specified."
EFRAG Implementation Guidance - Materiality Assessment - p9.


See also


Other resource

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