Wolters Kluwer Financial Services Outlines Three Key IFRS 9 Actions to Assist Firms in Preparation for the 2018 Application Date
With the International Accounting Standards Board confirming application of IFRS 9 for 2018, Wolters Kluwer Financial Services has outlined three key actions which financial institutions should take in preparation for the date. The IASB IFRS 9 project, which replaces the current IAS 39 standard, addresses classification and measurement, impairment methodology and hedge accounting. At the IFRS Foundation Conference 2014, held in London on 23rd and 24th June, panel discussions consisting of preparers, auditors, advisors and regulators, highlighted the significant workload placed on organizations leading up to 2018. To assist financial institutions, Wolters Kluwer Financial Services advises to take the following three key actions to meeting the 2018 application date:
- Perform impact analysis within the organization in order to identify where the changes lie and how to adjust accounting policies more closely to existing business models.
- Ensure that the organization understands that the likely impact on IT systems is significant. IFRS 9 implementation should not be underestimated. Leveraging existing risk systems’ data alongside specific IFRS 9 models and adjustments can alleviate some of this impact.
- Conduct a parallel run for one year before 2018 to iron out any issues. To achieve this, organizations should ultimately implement an IFRS 9 solution by 2016.
“For those firms that have not begun preparations for IFRS 9 yet, the message is clear; time is ticking with at least three years required to implement the multitude of different rules, calculations and disclosures, based on the IASB’s own benchmark test,” said Jeroen Van Doorsselaere, global subject matter expert, Finance and Performance at Wolters Kluwer Financial Services. “One route to take would be to align the risk and finance functions at least from a data perspective, meaning that risk data can be reused and applied to certain IFRS 9 models, such as the expected loss model for impairment, which is due to be finalized at the end of July. Moves like this save both time and cost while providing an integrated view.”
Wolters Kluwer Financial Services issued a comment piece which further highlights the three key actions and also looks in depth at the IFRS 9 requirements and challenges discussed at the recent IFRS Conference in London. For more information on the company’s IFRS solution and its IFRS 9 functionality, go to http://www.wolterskluwerfs.com/summix/ifrs.aspx