Kuwait Companies Law No. 1 of 2016, as amended, requires the business entities to adopt International Financial Reporting Standards (“IFRS”) when preparing their financial statements. In this context, the International Account Standards Board (“IASB”) issued the IFRS 17 “Insurance Contracts”, which replaces IFRS 4 and required the Insurers to adopt the same as of 1 January 2023.
What are the requirements of IFRS 17 application from accounting and actuarial perspectives?
The application of IFRS 17 requires entities, subject to it from accounting perspective, to:
- Elect one of the three approaches defined by the Standard to measure insurance contracts, which will require developing policies and procedures manual.
- Modify the financial statements presentation method, which requires making amendment to the chart of accounts as well as determining the relevant disclosures.
The application of IFRS 17 requires entities, subject to it from actuarial perspective, to:
- Acquire an actuarial-driven software to analyze insurance contracts as per the measurement approach to be approved.
- Recruit an actuary to manage the software that analyzes insurance contracts in accordance with the IFRS 17 requirements.
What are the challenges facing the insurance companies when applying IFRS 17?
- Higher cost of acquiring actuarial-driven software license for measuring insurance contracts and synchronization with accounting software.
- Scarcity of CFOs who have know-how of the accounting applications of IFRS 17.
- Scarcity and higher cost of employment of actuaries.
What are the IFRS 17 managed services offered by Baker Tilly?
- Providing accounting and actuarial consulting services as Managed Services provider
- Providing accounting consulting service in accordance with the IFRS 17requirements
- Providing actuarial-driven software solution in accordance with the IFRS 17 requirements
What is the competitive edge of Baker Tilly of providing these services?
- Baker Tilly auditors are registered with Insurance Regulatory Unit – IRU
- Baker Tilly is classified with local bank as credible accounting firm
- Baker Tilly staff members are professionally qualified and well trained
- Baker Tilly credentials express the client’s trust
- Baker Tilly firm is certified for ISO 9001, ISO 14001, ISO 45001, and ISO 27001
reflecting the quality of internal control of the management.
- Baker Tilly firm is member of the top 10 global accounting networks