Implementing IFRS 19—Insights from global preparers

Summary

The webcast discusses the implementation of IFRS 19 for subsidiaries without public accountability, featuring insights from experts in the field. The discussion highlights the benefits of adopting IFRS 19, including reduced duplication of financial statements and improved efficiency in reporting across different jurisdictions. Panelists emphasize the need for clarity in compliance statements and the interplay between IFRS 18 and 19. The session concludes with a focus on the future of these standards, underscoring their significance in simplifying financial reporting and enhancing consistency for global subsidiaries.

Takeaways

• 😀 IFRS 19 aims to simplify the financial reporting process for subsidiaries without public accountability, enhancing overall efficiency.
• 😀 Many companies face the challenge of preparing financial statements under multiple GAAPs for consolidation and local reporting.
• 😀 Adoption of IFRS 19 can significantly reduce the duplication of financial statements, saving time and resources.
• 😀 A primary benefit of IFRS 19 is the decreased burden of reconciling local GAAP with IFRS, leading to improved consistency.
• 😀 Effective implementation of IFRS 19 depends on local authorities permitting its use, with an expected timeline of two to three years for widespread adoption.
• 😀 Companies applying IFRS 19 must make clear compliance statements in their financial disclosures regarding adherence to IFRS standards.
• 😀 Entities can adopt IFRS 19 before IFRS 18, but must still comply with specific disclosure requirements as outlined in the standards.
• 😀 The IASB plans to publish a catch-up exposure draft to address new disclosure requirements arising after IFRS 19's initial publication.
• 😀 The knowledge required within organizations can be streamlined, focusing on IFRS 19 rather than multiple local GAAPs.
• 😀 Ongoing communication and collaboration between the IASB and companies are essential for the successful implementation of IFRS 19.

Q & A

What is the primary aim of developing IFRS 9?

The primary aim of developing IFRS 9 is to simplify the preparation of financial statements for subsidiaries while maintaining their usefulness to users.

Who led the project developing IFRS 9?

Michelle Sansom, the Technical Project Director at the IASB, led the project developing IFRS 9.

What are the main reporting challenges faced by companies with multiple subsidiaries?

Companies often face challenges managing multiple local GAAP requirements alongside consolidated reporting, which involves significant effort in preparing duplicate financial statements.

What benefits does IFRS 9 provide in terms of financial statement preparation?

IFRS 9 reduces the duplication of financial statements, decreases the need for reconciliations between local GAAP and IFRS, and simplifies compliance by allowing the use of a single template for statutory financial statements.

How does IFRS 9 relate to local GAAP?

Entities adopting IFRS 9 must still comply with local GAAP for statutory purposes, but IFRS 9 allows them to use IFRS for local reporting, thereby reducing complexity.

What is the expected timeline for the implementation of IFRS 9?

The implementation of IFRS 9 is expected to take at least 2-3 years, depending on local authority approvals.

What should entities include in their compliance statements when adopting IFRS 9?

Entities should explicitly state their compliance with IFRS standards in their financial statements, indicating that they are applying IFRS 9 while adhering to applicable local GAAP.

How should companies handle comparative periods during the first year of IFRS 9 implementation?

Companies need only provide comparatives for information included in their financial statements for the first year of IFRS 9 implementation, which simplifies reporting.

Can a company adopt IFRS 9 before implementing IFRS 18?

Yes, companies can adopt IFRS 9 before IFRS 18, but they must comply with the reduced disclosure requirements set out in Appendix B of IFRS 9.

What process will the IASB follow to keep IFRS 9 updated with new standards?

The IASB will regularly update IFRS 9 in conjunction with any new or amended IFRS standards, including issuing exposure drafts for consultation.