IFRS 17: 2018 is a year of big decisions

25 January 2018

As we enter the New Year, I wait in eager anticipation for the next steps in the IFRS 17 journey and to see how events will unfold in 2018. Though there are still lots of moving pieces, I would like to take this opportunity to run through my predictions of some of the main developments we can expect over the coming year.

To start with, I would hope that most companies will start to firm up and finalise their implementation plans and initial accounting policy choices. This will include decisions such as their choice of software provider, system, consultants, the size of their ambition and firming up transition decisions.

I would also expect the Transition Resource Group (TRG) - the IASB’s working group looking at implementation of the standard - to start influencing proceedings as it starts its technical discussions. The TRG will play an increasingly important role over the course of 2018 in technical interpretations.

We will also see a gradual realisation amongst tax authorities in 2018 that there is a new standard on the horizon which is likely to have a significant impact on their day to day business. Our impact assessments show potentially significant amendments to future profit profiles and earnings on transition – tax authorities will need to identify exactly what these impacts are, and be ready to deal with the tax implications in their jurisdictions.

In order to get on the front foot, it is likely more regulators around the world will start to get to grips with the new standard, and engage more fully in respect of the impact on their particular market and local companies. This may have consequences, such as “encouraging” their markets towards a specific accounting choice available in the standard.

Companies will also start considering and gently floating initial messages to the market around the potential impact on their reported numbers. This will generate attention from investors and analysts who will sit up and take notice towards the end of 2018.

So…..a perfect storm of regulatory, tax authority, investor and analyst interest in the new standard, which is going to make 2018 an interesting year. While we wait to see the accuracy or otherwise of my predictions, please keep a look out for my next blog which will focus on how best to engage auditors in anticipation of the new standard.

Alex Bertolotti

Alex Bertolotti | Partner
Profile | Email |  +44 (0)75 2529 8694

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