IFRS (International Financial Reporting Standards) or International Accounting Standards play a critical role in financial reporting because countries all over the world use them for financial statement preparation and presentation. The International Financial Reporting Standards (IFRS) are a globally adopted accounting standard that makes corporate accounts more clear and comparable. The implementation of IFRS standards will aid organisations in simplifying and improving their accounting operations.
The IASB was established in order to meet the demands of new economic difficulties, to correct probable errors, and to improve the presentation of financial statements from time to time. Either create new International Financial Reporting Standards (IFRS) or update existing ones. Alternatively, existing standards could be reissued with appropriate changes. The date from which the newly issued or reissued IFRS shall be considered in the financial statements shall always be specified.
The impact of International Financial Reporting Standards (IFRSs) on revenue, expenses, assets, and liabilities to an entity must be evaluated in order to understand the impact on – recognition, measurement, and disclosure on revenue, expenses, assets, and liabilities to an entity when a new standard or revision to existing standards is implemented.
The growing complexity of financial reporting, as well as the rapid rate of change, has resulted in a considerable increase in demand for high-level accounting guidance from a specialist. Our knowledgeable and efficient advice staff will assist firms in adopting and implementing IFRS standards with ease.
Impact analysis of adoption and implementation of new/revised IFRS standards.
One of the IFRS advisory services we offer is IFRS impact assessment. When a new or revised accounting standard is introduced in a business on a certain date, an IFRS impact assessment is performed. Because of a change in measurement of the item, the value disclosed in the financial statements may need to be revised when compared to those generally provided under existing practise. In some circumstances, the impact will be limited to the information presented in the financial statement, rather than the financial data themselves.
Regardless of whether the impact is on the amount to be recognised or measured, or on the disclosure requirements, it is critical to assess the impact of IFRS implementation before compiling financial statements to present to stakeholders and/or the public. Before the financial year ends, management will have a good notion of the impact of any new or updated IFRS. Some of the important IFRSs that have recently been issued/revised or are in the process of being released, and whose impact on financial statements may be material for entities, are listed below:
The transfer of control of identified performance responsibilities is the topic of IFRS 15. We will evaluate how performance obligations fulfil the requirements of the IFRS 15 on income from various sources based on the type, terms, and conditions of the contracts made with customers. Trading, construction, and services are just a few examples of possible sources. The International Financial Reporting Standards 15 (IFRS 15) establishes a single model for all commodities and services across all industries.
IFRS 16 – Leases
Our IFRS advisory services for IFRS 16 – Leases will broadly cover the following:
IFRS 9 – Financial Instruments
The impact evaluation will include the following topics in general, as per IFRS 9 – Financial Instruments:
One of the requirements of IFRS 9 – financial instruments is the requirement for an impairment allowance. It must be done on a regular basis, with any changes in the impairment allowance being recorded in the profit and loss statement.
IFRS 17- Insurance Contracts
Insurance obligations must be recognised at current fulfilment value under IFRS 17, which establishes a more consistent measurement and presentation method for all insurance contracts. IFRS 17 replaces IFRS 4 Insurance Contracts and related interpretations and is effective for fiscal years beginning on or after January 1, 2023, with earlier adoption permissible if both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments are used.
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