Questions & Answers
Could you please specify the short-term time horizon?
- Time horizon
Background
The following background to the question was provided by the submitter: ‘Since the short-term time horizon is defined as “the period adopted by the undertaking as the reporting period in its financial statements”, the question is whether short-term refers to the reporting period itself or the year after the reporting period, and the reference does only clarify the length of the period. ‘
ESRS 1 paragraph 77 states: ‘When preparing its sustainability statement, the undertaking shall adopt the following time intervals as of the end of the reporting period:
(a) for the short-term horizon: the period adopted by the undertaking as the reporting period in its financial statements …’.
Answer
The short-term time horizon normally lasts one year, from the end of the reporting period.
The length of the short-term time horizon is defined as the period adopted by the undertaking in its financial statement as the reporting period; this period extends from the end of the reporting period into the future (ESRS 1 paragraph 77 (a)).
The reporting period adopted by the undertaking in its financial statements is in nearly all cases one year (and in rare cases longer if the operating cycle is longer than one year (e.g. might be the case for producers of whisky or cigars based on the definition of operating cycle in IFRS (IAS 1)).
This short-term period lasts one year, from the end of the reporting period (also often called balance-sheet date), as stated in ESRS 1 paragraph 77 (‘… as of the end of the reporting period …’).
Relations
Paragraph | Content |
|---|---|
for the short-term time horizon: the period adopted by the undertaking as the reporting period in its financial statements; | |
for the short-term time horizon: the period adopted by the undertaking as the reporting period in its financial statements; | |
for the short-term time horizon: the period adopted by the undertaking as the reporting period in its financial statements; |