Nigerian companies await SEC clarifications on IFRS reporting — Premium Times Nigeria
In Nigeria, capital market participants are awaiting clarifications from the Securities and Exchange Commission (SEC) regarding the submission of implementation plans for the IFRS S1 and IFRS S2 sustainability reporting standards by 15 October. This position was expressed in an opinion piece for Premium Times Nigeria by Innocent Okwuosa, former president of the Institute of Chartered Accountants of Nigeria.
Regulator’s requirements
In a circular dated 23 September, the SEC drew attention to the roadmap of Nigeria’s Financial Reporting Council (FRC) for introducing IFRS sustainability disclosure standards. The circular provides that public companies and capital market operators classified as entities of significant public interest must submit an implementation plan to the regulator by 15 October.
The plan must contain at least eight components: corporate governance mechanisms and board oversight, a gap assessment regarding IFRS S1 and IFRS S2, an implementation timetable, data collection and reporting systems, internal controls and assurance mechanisms, employee training, the expected year of first reporting, and key implementation challenges.
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Questions over timelines
The FRC roadmap provides for early adoption for reporting periods ending no later than 31 December 2023. Voluntary adoption of the standards covers periods beginning from 1 January 2024 and ending no later than 31 December 2027. Mandatory adoption for companies is to begin for periods from 1 January 2028, and for small and medium-sized enterprises from 1 January 2030.
Okwuosa noted that the FRC provides for the phased submission of 17 documents over 12 months. In his view, the SEC requirement could be interpreted as a need to submit all eight components of the plan simultaneously, although some of them belong to different preparation stages in the FRC system.
The author also raised the issue of possible sanctions for failing to meet the deadline. He noted that the FRC roadmap does not provide for regulatory sanctions during the voluntary implementation period and expressed hope that the SEC would provide further clarification before 15 October.
