FSA Credential Level I flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

IFRS S1 objective

Requires entities to disclose sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, access to finance, or cost of capital over the short, medium, or long term.

IFRS S1 four pillars

Governance, strategy, risk management, and metrics and targets. These are the core content areas an entity must disclose for sustainability-related risks and opportunities under IFRS S1.

Primary users definition

Existing and potential investors, lenders, and other creditors. IFRS Sustainability Disclosure Standards are written for these users, who make decisions about providing resources to the entity.

IFRS S2 scope 3 relief

In the first year of applying IFRS S2, an entity may omit scope 3 greenhouse gas emissions. The relief is a transition provision, not a permanent exemption from scope 3 disclosure.

GHG Protocol basis

IFRS S2 requires greenhouse gas emissions to be measured in accordance with the GHG Protocol Corporate Standard, covering scope 1, scope 2, and scope 3 emissions, unless a transition relief applies.

IFRS S2 scenario analysis

An entity must disclose its assessment of climate resilience, including how it used scenario analysis, the scenarios chosen, key assumptions, and the time horizon considered, to show strategic resilience.

Connected information requirement

IFRS S1 requires sustainability disclosures to be connected to the financial statements and to each other, so users can understand the links between sustainability matters and financial performance.

SASB industry count

The SASB Standards cover 77 industries across 11 sectors. Each industry standard identifies disclosure topics and accounting metrics likely to be material for that industry.

SASB materiality basis

SASB topics are selected for evidence of financial materiality: information likely to affect a company's financial condition or operating performance and therefore of interest to investors.

SASB activity metrics

Quantitative metrics such as revenue, production volume, or employee count that provide context for normalizing a company's performance against its SASB accounting metrics within an industry.

SASB codification example

A SASB reference such as FB-NB-110a.1 encodes the sector, the industry, and the topic and metric number, allowing precise citation of a specific disclosure requirement.

SASB standard maintenance

The SASB Standards are now maintained by the ISSB within the IFRS Foundation, and IFRS S1 references them as a source of industry-specific guidance for entities.

SASB sector list

Eleven sectors, including Consumer Goods, Financials, Health Care, Infrastructure, Technology and Communications, Transportation, Extractives and Minerals Processing, and Renewable Resources and Alternative Energy.

SASB comparability scope

SASB metrics are intended to be comparable among companies within the same industry. They are not designed to be compared across different industries or sectors.

Integrated reporting six capitals

Financial, manufactured, intellectual, human, social and relationship, and natural. Value creation is described as increases, decreases, or transformations of these capitals over time.

Connectivity of information

An <IR> guiding principle requiring the report to show the interrelationships and dependencies among factors affecting value creation, across the capitals and across time horizons.

IR content elements

Organizational overview and external environment, governance, business model, risks and opportunities, strategy and resource allocation, performance, outlook, and basis of preparation and presentation.

IR business model

The system of inputs, business activities, outputs, and outcomes that aims to create value over the short, medium, and long term, as described in the <IR> Framework.

IR guiding principles

Strategic focus and future orientation, connectivity of information, stakeholder relationships, materiality, conciseness, reliability and completeness, and consistency and comparability, as set out in the <IR> Framework.

IR materiality basis

Materiality in integrated reporting is determined by the effect on the organization's ability to create value, considering the interests of key stakeholders, not solely by financial materiality to investors.

IR Framework issuer

The International <IR> Framework was issued by the International Integrated Reporting Council, which became part of the IFRS Foundation, aligning integrated reporting with ISSB work.

TCFD four pillars

Governance, strategy, risk management, and metrics and targets. The TCFD's 11 recommended disclosures are distributed across these four pillars for climate-related financial disclosure.

TCFD strategy disclosures

Require description of climate risks and opportunities over short, medium, and long term, their impact on strategy and financial planning, and the resilience of strategy under different scenarios.

TCFD physical risks

Acute physical risks are event-driven, such as floods or storms. Chronic physical risks are longer-term shifts, such as sea level rise or sustained temperature change.

TCFD transition risks

Risks arising from the shift to a lower-carbon economy, categorized as policy and legal, technology, market, and reputation risks that can affect an organization's financial position.

TCFD scenario analysis

A recommended tool for assessing strategic resilience under different climate scenarios, including a 2°C or lower scenario, with disclosed assumptions, scenarios, and time horizons.

TCFD disbandment

The TCFD was disbanded in 2023 and monitoring transferred to the IFRS Foundation. IFRS S2 is built on the TCFD recommendations, so TCFD-aligned disclosure is largely consistent.

TCFD governance disclosures

Require describing the board's oversight of climate-related risks and opportunities and management's role in assessing and managing those risks and opportunities within the organization.

CDSB Framework principles

Relevance and materiality, faithful representation, comparability and consistency, clarity and conciseness, and verifiability and assurance, applied to environmental and climate change information.

CDSB reporting boundary

The CDSB Framework requires disclosure of the organizational boundary, reporting period, and basis of preparation, so environmental information aligns with the financial statements.

CDSB consolidation

The Climate Disclosure Standards Board was consolidated into the IFRS Foundation in 2022, and its guidance informed the development of the ISSB Standards; CDSB materials are no longer maintained.

CDSB estimation uncertainty

Climate-related disclosure under CDSB requires disclosure of the methodology used and the assumptions and estimation uncertainties, including use of proxies and estimates in greenhouse gas reporting.