IFRS 9 Implementation Workshop

Transcription

1 IFRS 9 Implementation Workshop CPA Nebart Avutswa Ag. Chief Manager Professional Services, ICPAK Hilton Hotel, Nairobi 31 st 1 st February 2018 Uphold public interest

2 The Topic The Need for compliance with IFRS 9

3 Background Information The Institute of Certified Public Accountants of Kenya (ICPAK) was established in The Institute is a member of the Pan-African Federation of Accountants (PAFA) and the International Federation of Accountants (IFAC) since 1980, the global umbrella body for the accountancy profession..

4 CORE VALUES The Institute is guided by the following core values: 1. Credibility, 2. Professionalism and 3. Accountability.

5 Background Information

6 ICPAK Mandate The Institute draws its mandate from the Accountants Act (no 15 of 2008). The Act prescribes the following as the functions of the Institute:

7 Mandate 1. To promote standards of professional competence and practice amongst members of the Institute 2. To promote research into the subject of accountancy and finance and related matters, and the publication of books, periodicals, journals and articles in connection therewith; 3. To promote the international recognition of the Institute. 4. To advise the Examination Board on matters relating to examinations standards and policies;

8 Mandate Con t 5. To advise the Minister on matters relating to financial accountability in all sectors of the economy; To carry out any other functions prescribed for it under any of the other provisions of this Act or any other written law and 6. To do anything incidental or conducive to the performance of any of the preceding functions

9 The DAWN of IFRS9

10 10 SMOs 1. AQA 2. Education 3. ISAs 4. Ethics 5. IPSAs 6. Discipline 7. IFRS Which SMO is affected

11 11 SMO 7 INTERNATIONAL FINANCIAL REPORTING STANDARDS Subject Matter SMO 7 sets out the obligations of member bodies of IFAC in relation to International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB).

12 12 SMO 7 Once you ve started it s like a runaway train

13 13 Justification Globalization Modern economies rely on crossborder transactions and the free - flow of international capital.. More than a third of all financial transactions occur across borders, and that number is expected to grow.

14 14 Other Definitions Investors seek diversification and investment opportunities across the world, while companies raise capital, undertake transactions or have international operations and subsidiaries in multiple countries.

15 Benefits of Standards 1.Transparency by enhancing the international comparability and quality of financial information 2. Strengthening of accountability. Bridges information gap between the providers and users of capital 3.IFRS Standards contribute to economic efficiency by helping investors to identify opportunities and risks across the world, thus improving capital allocation

16 Overview Of IFRS 9 The dynamic nature of the financial reporting standards environment calls for close attention to the evolving trends in the standard setting arena. New standards are coming up all the time, With revisions and amendments being undertaken to the existing standards every time. This means that the modern day professional accountant needs to keep abreast with all these key developments.

17 Overview Of IFRS 9 One such change is the new International Financial Reporting Standard (IFRS) 9 which replaces International Accounting Standard (IAS) 39. This is in respect to the methodology used in providing for uncertainties in economic benefits of financial assets, loans or debts issued by financial institutions (impairment provisions on financial instruments). The new standard is effective from 1 January 2018 and affects any financial statements prepared after the date.

18 Overview Of IFRS 9 The new impairment requirements in IFRS 9 are based on an Expected Credit Loss (ECL) model and replaces the IAS 39 Incurred Loss (IL) model. Entities will have to recognize not only incurred credit losses but also losses that are expected to be incurred in future.

19 Overview Of IFRS 9 The best way to predict the future is to create it Peter Drucker

20 Overview Of IFRS 9 As way of responding to the existing complexity of the financial reporting arrangements which have been occasioned by the introduction of the new standard, the Institute of Certified Public Accountants of Kenya has organized this sensitization workshop to prepare members on the new developments expected during the implementation of IFRS 9.

21 21 19 THE END Thank You!