Business Daily Kenya:
The International Accounting Standards Board (IASB) has moved to make insurance firms more transparent along with comparable through the International Financial Reporting Standards (IFRS) 17.
completely new standards will take over the existing IFRS 4, which allows a myriad of different accounting policies resulting in a lack of comparability among insurance firms.
The completely new insurance standard brings fundamental alterations to international insurance accounting contracts globally along with is usually set to have huge business implications beyond finance, actuarial along with systems development areas.
This particular will also introduce radical alterations to underwriting along with claims processes. “This particular is usually additional progress towards accountability within the insurance sector.
Instead of going by traditional financial statements, the sector will make companies more accountable by requiring them to show liquidity status within the process,” said John Kirimi, Sterling Capital Investment Director, adding policyholders can right now use a standardised approach to assess transparency for any insurance company.
According to PricewaterhouseCoopers (PwC), IFRS 17 will give financial statements users a whole completely new perspective which will change ways in which financial analysts interpret along with compare companies globally.
The standard also places insurers reporting under IFRS 17 on a level platform. “As East African insurance companies complete their audit cycles for the first quarter, many will start to focus on the completely new standard.
At a minimum, they need to conduct appropriate capacity building along with an impact assessment by the end of the 2017,” said Anthony Murage PwC Partner, Capital Markets along with Accounting Advisory Services for the East Africa Region.
The IFRS 17, which should be fully embraced by January 1, 2021, brings both benefits along with challenges to insurers who will need to gain an understanding of the completely new alterations, particularly impacts on their businesses.
With the completely new standards, core business processes may need to be overhauled while products will be re-designed, leading to substantial implications in systems.
“The key areas of focus for organisations at This particular stage are: where is usually the organisation right now, how long do you think the transition process might take, along with what is usually the level of effort (resources, budget, systems development time) required to meet the requirements,” said Murage.There is usually still very little appreciation of the transformational impact of the standard despite companies in East Africa being aware of IFRS 17.
“Early movers within the region have embarked on capacity building along with gap along with impact assessment. Most within the industry are yet to undertake any significant activities along with are likely to begin their considerations over This particular year,” Murage said.
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completely new bookkeeping rules make insurers ‘more open’