IFRS (International Financial Reporting Standards) or International Accounting Standards plays a very crucial role in financial reporting as countries across the globe followed IFRS for the preparation and presentation of the financial statements.
IFRS is the globally accepted Accounting standards so that company accounts prepared based on IFRS are more understandable and comparable. The adoption of IFRS standards will help the entities to simplify the accounting processes and improve efficiency.
In order to cope up with the requirement of new challenges in the economy or to rectify the possible errors, or for a better presentation of the financial statements from time to time, the IASB
Such newly issued or reissued IFRS will always be specifying the date from which it will be effective be considered in the financial statements.
The effect of an International Financial Reporting Standards (IFRSs) needs to be assessed to understand the impact on – recognition, measurement, and disclosure on revenue, expenses, assets, and liabilities to an entity when a new standard or revision in existing standards taken place.
The increasing complexity of financial reporting and the rapid pace of change has led to a significant increase in demand for high-level accounting advice from an expert in the field. Our efficient and expert advisory team will help the businesses for the easy adoption and implementation of IFRS standards.
IFRS Advisory Services Dubai, UAE.
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IFRS impact assessment is one of the IFRS advisory services provided by us. IFRS impact assessment is an assessment conducted when new or revised accounting standard is implemented in any business from a specific date. Sometimes the value disclosed in the financial statements needs to be changed while comparing with those normally disclosed under existing practice, because of change in measurement of the item. In some cases, the impact will be only on information disclosed in the financial statement and may not necessarily impact the financial figures. In certain situations, items that were not accounted to date or had a different treatment earlier may change by adopting a new or revised one. In some other cases, the impact could be on both; the financial figures and the disclosure requirements.
Anyways, whether the impact is on the amount to be recognized or the amount to be measured or on the disclosure requirements, it is important to analyze the impact on the introduction of IFRS well before preparing the financial statement to report to the stakeholders and/or to the public. The management will then have a fair idea of the impact of such new or revised IFRS well before closing the financial year.
Some of the relevant IFRSs, recently issued/revised or are in the process of release, where the impact of such standards on the financial statements may be material for the entities are given below :
IFRS 15 focuses on the transfer of control of identifies performance obligations. Based on the nature, terms, and conditions of the contract entered with customers, we will assess how performance obligations meet as per the requirement of the IFRS 15 on revenue from different sources. The source includes but is not limited to Trading, Construction, Services, etc. IFRS 15 provides a single model of all goods and services all goods and services across all industries.
The IFRS 15 Impact assessment as part of our IFRS advisory services will cover broadly the following:
For IFRS 16 – Leases, our IFRS advisory services will broadly cover the following:
As per IFRS 9 – Financial Instruments, the impact assessment will cover broadly the following:
The need for an impairment allowance is one of the requirements under IFRS 9 – financial instruments. It has to be done on a periodic basis and the change in the impairment allowance has to be reported in the profit and loss account.
IFRS 17 requires insurance liabilities to be measured at a current fulfilment value and provides a more uniform measurement and presentation approach for all insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts and related interpretations and is effective for periods beginning on or after 1 January 2023, with earlier adoption permitted if both IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial instruments have also been applied.
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