International accounting standards witness rapid changes. Accordingly, business entities are urged to engage professional accounting firms to assist them with implementing the same.
The IASB issues several new International Financial Reporting Standards and amendments to the existing standards, which business entities should adopt by their respective effective dates.
What are the significant applicable new and revised IFRS?
The critical International Financial Reporting Standards, which featured significant argument in their application techniques, include:
IFRS 9 Financial Instruments
IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.
In the State of Kuwait, the Ministry of Commerce & Industry issued the Ministerial Resolution No. 603 of 2017 regarding application of the IFRS 9 “Financial Instruments”, which became effective from 1 January 2018.
IFRS 15 Revenues from Contracts with Customers
IFRS 15 replaces IAS 11 “Construction Contracts” and IAS 18 “Revenues”. The standard is effective for annual periods beginning on or after 1 January 2018. IFRS 15 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers. This core principle is achieved through a five-step model framework, i.e. identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when the entity satisfies a performance obligation.
IFRS 16 Leases
IFRS 16 replaces IAS 17 “Leases” and is effective for annual periods beginning on or after 1 January 2019. This standard requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance leases under IAS 17 with limited exceptions for low-value assets and short-term leases.
IFRS 17 – Insurance Contracts
IFRS 17 supersedes IFRS 4 Insurance Contracts and is effective for annual periods beginning on or after 1 January 2021. This standard establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the financial statements.
What is the added value to business entities from IFRS Applications services?
- Ensure soundness and accuracy of financial statements and reports.
- Ensure compliance with IFRSs.
- Ensure compliance with legal and regulatory requirements.
- Enhance stakeholders’ confidence.
What are the services offered by Baker Tilly?
- Gap analysis to identify the current situation and the requirements of standards.
- Assess the impact of the adoption of standards.
- Assist our clients with developing accounting policies and procedures for appropriate adoption of the standards.
- Develop roadmap for the adoption of standards.
- Support our clients in the adoption phase.
- Provide training courses tailored to each client’s requirements to address the adoption mechanism of the required standards.