The International Financial Reporting Standard is anticipated to be implemented very soon, according to Leadway Assurance Limited.
According to The Punch, an international financial reporting standard called IFRS 17 (formerly known as IFRS 4 Phase II) was created by the International Accounting Standards Board and would provide new guidelines for disclosing profit emergence from insurance contracts.
It is expected to go into effect on January 1, 2023, and the primary goal of the IFRS is to harmonize insurance accounting across the board in order to aid users of accounts in making informed comparisons between businesses, their historical performance, their present financial condition, and their risk exposure.
The director of finance, Mr. Raphael Akomolede, discussed the position of Leadway regarding the implementation of IFRS 17 during a one-day workshop on “Navigating the New Financial Reporting Standard” for the Nigerian Association of Insurance and Pension Editors in Lagos, which was organized by Leadway Assurance.
He claimed that the business had finished solution design, which addresses gap analysis, financial and operational impact assessment, future state of finance process/technology gap analysis, development, documentation, and review of the target operating model, preparation of technical documents and reviews, and vendor selection for IFRS 17.
“The company’s key divisions are currently working together on system testing and implementation (pre and post); reviewing and producing 2021 and 2022 financial positions; and producing interim IFRS 17 compliant financial statements including transition disclosure.”
Regarding the issue with the existing IFRS 4, he claimed that the IFRS 17 superseded the IFRS 4, an interim standard that permitted insurers to measure insurance contracts using regional generally accepted accounting principles.
“There is currently no standard method for accounting for insurance contracts, making it difficult for investors to determine which categories of contracts are profitable and which are not.”
According to him, IFRS 17 had a number of positive effects, including improved comparability for the first time, current and accurate measurement of insurance contract liabilities, a more understandable presentation of financial performance and position, improved disclosure and transparency, and a clear separation of insurance from investment activities.
While praising the National Insurance Commission’s implementation plan for IFRS 17 for the implementation of IFRS 17 for the insurance industry in Nigeria, he said the commission was working seriously since 2019 towards ensuring the full adoption of IFRS 17 in the Nigerian insurance industry.
