The three new International Financial Reporting (IFRS) Standards, issued by the International Accounting Standards Board, are expected to significantly affect the financial statements of many issuers globally, given the breadth of their applicability according to a Statement on Implementation of New Accounting Standards related to revenue, financial instruments, and leases, released by the Board of the International Organization of Securities Commissions (IOSCO).
The statement highlights the importance of the implementation process by issuers and their audit committees, and the full, accurate and timely disclosures of the possible impacts of adopting the new standards.
The statement also provides a series of matters for issuers, as well as their audit committees and auditors, to consider as issuers adopt the new standards and auditors perform related audit procedures.
Both the IOSCO Objectives and Principles of Securities Regulation and the IFRS Standards indicate the need for transparent disclosure by issuers regarding the possible impact that the application of new standards will have on the issuer ́s financial statements.
IOSCO considers the accuracy, integrity, and comparability of issuer disclosure to be essential for maintaining investor confidence and therefore facilitating a stable international financial system.
IFRS Standards require disclosure in the notes of the financial statements of known or reasonably estimable information regarding this possible impact, prior to the effective date of the new standards.
Subject to jurisdictional decisions regarding either adoption or effective dates, IFRS 15, Revenue from Contracts with Customers, and IFRS 9, Financial Instruments, are effective for annual periods beginning on or after 1 January 2018, while IFRS 16, Leases, is effective for annual periods beginning on or after 1 January 2019.