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 June 23 and 24, 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 has provided 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 who have not begun preparations for IFRS 9 in 2018, 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 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.
About Wolters Kluwer Financial Services
Wolters Kluwer Financial Services provides more than 15,000 customers worldwide with risk management, compliance, finance and audit solutions that help them successfully navigate regulatory complexity, optimize risk and financial performance, and manage data to support critical decisions. With more than 30 offices in 20 countries, our prominent brands include: AppOne®, ARC Logics®, AuthenticWeb™, Bankers Systems, Capital Changes, CASH Suite™, FRSGlobal, FinArch, GainsKeeper®, NILS®, TeamMate®, Uniform Forms™, VMP® Mortgage Solutions and Wiz ®. Wolters Kluwer Financial Services is part of Wolters Kluwer, which had 2013 annual revenues of €3.6 billion ($4.7 billion), employs 19,000 employees worldwide, and maintains operations in over 40 countries across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.