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January 2018
An online, self-diagnostic toolFind out your potential impact areas under the new accounting standards (IFRS 15 and IFRS 9)
Accounting Advisory Services
IFRS Health Check
The International Accounting Standards Board (IASB) has issued new accounting standards on revenue and financial instruments. Companies need to comply with them when preparing financial statements for annual periods beginning on or after 1 January 2018 (early application permitted).
IFRS 15 Revenue from Contracts with Customers
IFRS 9 Financial Instruments
What do you need to do?
The new accounting rules
– Replaces IAS 39 Financial Instruments: Recognition and Measurement
– Introduces a generational change in the way in which companies account for all financial instruments
– Includes new guidance on the classification and measurement of financial instruments, impairment and hedge accounting
– Replaces the following revenue guidance: IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets to Customers, and SIC 31 Revenue-Barter Transactions Involving Advertising Services
– Introduces a five-step model that is likely to affect the way companies account for revenue
– Could impact the timing of revenue recognition; the profile of margin on contracts; contract negotiations with customers; debt covenants; and employee reward schemes
Year 2017 Understand the potential impact areas under IFRS 15 and IFRS 9:
– To disclose the ‘expected accounting policy changes’ and the ‘estimated financial impact of the changes’ in the financial statements for the year ended 2017, in order to ensure compliance with the disclosure requirements under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
– To plan appropriately (budget, timeline, service provider, etc.) for implementation in 2018
– To immediately inform stakeholders (shareholders, board of directors’ audit committee, banks, other lenders, etc.) about possible impacts thereby avoiding any last-minute surprises
Year 2018 (mandatory effective year)
Implement the accounting changes under IFRS 15 and IFRS 9:
– To prepare financial statements (annual or interim) that comply with the requirements under the new standards
2018
2017
The KPMG IFRS Health Check is a simple, online self-diagnostic tool which can help companies understand their potential impact areas under the new accounting standards.
What are the benefits?
How will the tool work?
IFRS Health Check
Can facilitate various actions required to be performed by management for the year 2017: disclosure compliance, implementation plan and timely stakeholder communication
Can help save time and cost with a minimal investment
Can facilitate various decisions required to be made by the management for implementation in 2018: impact areas to focus on, engaging consultants, etc
The company would:
– Access the tool on the KPMG UAE website and register for online assessment
– Log-in and fill in the questionnaire toview your impact level under the new standard (free of charge)
– Receive a diagnostic report within 48
IFRS Health Check
hours on payment of a nominal fee:IFRS 15 - USD1,500IFRS 9 - USD750IFRS 16 - USD1,000Bundled package - USD2,750
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2017 KPMG Lower Gulf Limited, operating in the UAE and Oman, member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International. Designed by Creative UAE
Publication name: IFRS Health Check
Publication number: J1388
Publication date: December 2017
Yusuf Hassan PartnerKPMG Lower Gulf Limited E: [email protected]
Bhaskar SahayDirector KPMG Lower Gulf Limited E: [email protected]
Vijay AnandAssociate DirectorKPMG Lower Gulf Limited E: [email protected]
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