IFRS 9 and IFRS 15 become mandatory for annual periods beginning on, or after, 1 Jan 2018. What impact do these new standards have on financial statements?
IFRS 9 and IFRS 15 become mandatory for annual periods beginning on, or after, 1 Jan 2018. The Financial Reporting Council has reviewed what impact these new accounting standards have had on the disclosures companies have made in their financial statements before the new rules come into effect.
The FRC found significant variations in the information companies offered, and an absence of informative disclosures. In particular, it noted a significant number of companies that didn’t offer qualitative disclosures, or disclosures tailored to their specific circumstances and transactions.
The regulator has said it expects companies to include detailed quantitative disclosures about the effects of the new standards in their last set of accounts before they are implemented. It encourages companies to provide informative disclosures by reference to their existing accounting policies, tailored to their specific circumstances and transactions, including any key judgements that management would need to make.
Such disclosures are useful to investors, but companies should ensure that their transition projects are sufficiently advanced to support the planned disclosure.