New accounting standard will significantly impact the insurance industry, says ACCA

Date

18 May 2017

Sections

Euro & Finance
Innovation & Enterprise

Press release

ACCA (the Association of Chartered Certified Accountants) comments on IFRS 17 – the new insurance contracts standard – issued today by the International Accounting Standards Board (IASB).

Richard Martin, head of corporate reporting at ACCA, says:

“This is a significant moment when the IASB’s project on insurance accounting comes to fruition after 20 years of development. Those many years have been taken up with a fundamental examination of how insurance business could be best accounted for and extensive input from the insurance industry on how it can be implemented in a practical way.

“Existing insurance accounting treatments around the world are very variable and none are the same as IFRS17. They will by 2021 be replaced by a consistent treatment in all countries using global standards. The scope of this standard is limited because it applies only to the relatively restricted number of insurance companies, but they do form a very significant sector in the economy. But for those companies the impact will be very significant – both in terms of the changed accounting numbers that they will report and in terms of the data that may need to be assembled. Investors and other users of those financial statements will also have to adapt to the new numbers.

“Despite the long development period not all parties may be content with all aspects of the new standard. Though we think that all should recognise that consistent accounting treatments will be a major advance, and the imperfections perceived by some are an inevitable price that has to be paid.

“ACCA hopes that the endorsement of IFRS17 in the European Union and in other jurisdictions can now proceed swiftly to allow companies in particular the certainty and time to plan and then progress their transition to the new system. National standard setters such as the FRC in the UK will have to consider adapting their standards in the direction of IFRS17 where there are insurance companies that do not report under IFRS.”

- ends -

For media enquiries, contact:

Adele Gilbert, ACCA Newsroom
T: +44 (0)20 7059 5077
M: +44 (0)7753 242 464
E: adele.gilbert@accaglobal.com
Twitter@ACCANews

 

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com

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