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Everything IFRS – Are you prepared for these changes?

Umbrellas

Posted on March 24, 2016

For the finance team, navigating, interpreting and managing the implementation of new accounting standards is crucial. And for those of you who are working under IFRS, there are several key changes that should be on your radar.

IFRS 15 – Revenue from Contracts with Customers

What’s your revenue going to be in 2018? The IASB will release the final amendments to this standard in April 2016 and has committed to no further changes. You have less than two years to assess the impact and implement the changes required by this standard on your accounting, disclosure, processes, controls and systems. Unless all of your revenue streams are scoped out (e.g., leases, financial instruments, insurance contracts), your organization is going to be impacted.

IFRS 16 – Leases

How many leases will be on your balance sheet in 2019? IFRS 16 – Leases, was issued by the IASB in January 2016 and replaces the current IAS 17 – Leases for reporting periods beginning on or after January 1, 2019. Three years may seem far away but it actually isn’t. Decisions must be made, and several exemptions and practical expedients are available. There may be lease contracts that you wish to amend—not to mention the fact that the new standard could have a significant impact on your financial reporting, systems, process and controls. Early planning is key. 

IFRS 9 – Financial Instruments

Have you considered the impact of IFRS 9 – Financial Instruments and the financial reporting implications on your organization? The final Standard was released in July 2014 and you now have less than two years to assess the impact and implement the changes required by this Standard on your organization’s accounting, disclosure, processes, controls and systems. We believe a successful IFRS 9 implementation will be achieved through focused collaboration with Finance, Risk and Technology.  

IFRS 4 – Insurance Contracts

Did you know that the IASB has finally closed the chapter on the Insurance Contracts Project (commonly referred to as ‘IFRS 4 Phase II’) deliberations? At the February 16, 2016 meeting, the Board unanimously granted the IASB staff permission to begin the balloting process, intending to publish the final Standard by the end of 2016. This will mark the end of a journey for the IASB, and the beginning of a journey for insurers. We expect the transition date to be approximately three years from the issuance of the final standard. The new Standard will have far-reaching consequences for insurers from a data, process and systems perspective that will ultimately result in a fundamentally different income statement and balance sheet. 

Review our summary of these standards by accessing our IFRS effective in 2015 and beyond collection for further details.

We are here to help. If you have questions about IFRS or are looking for specific advice, contact IFRS@deloitte.ca.

 

Cindy Veinot

Cindy Veinot
Partner, National Services

Cindy Veinot has over 20 years of public accounting experience with Deloitte, having spent 13 of which as a partner.  She provides advisory services to clients who are evaluating new and complex transactions, adopting a new accounting standard or transitioning to a new accounting framework.  She has worked with clients on revenue recognition issues under multiple accounting frameworks, and is currently focused on helping clients assess the impact of the new revenue recognition standard, IFRS 15.

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