Countdown to Change
Auditors will have plenty of issues to consider as they and their clients prepare for the implementation and impact of four new IFRS, as Sophie Campkin outlinesWith the constant evolution of International Financial Reporting Standards (IFRS), auditors, as well as their clients, face significant challenges staying up to date with the new requirements.
Over the past few years, the International Accounting Standards Board (IASB) has issued four major new standards: IFRS Financial Instruments, IFRS 15 Revenue from Contracts with Customers, IFRS 16 Leases and IFRS 17 Insurance Contracts – and they may bring fundamental changes to Financial reporting requirements.
IFRS 15 and IFRS 9IFRS 15 and IFRS 9 were published in 2014 and are effective for accounting periods beginning on or after 1 January 2018. Early application of both standards is allowed, subject to local endorsements. IFRS 15 may change the amount and timing of revenue recognition and is expected to have the greatest impact for companies with long-term contracts or multiple-element arrangements. IFRS 9 introduces new classification requirements for financial assets based on the business model for managing the asset and the asset’s contractual cash flow characteristics, new impairment requirements based on expected rather than incurred credit losses and new hedge accounting requirements. It is expected primarily to have an impact on financial institutions.
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