Changes in IAS/IFRS in 2024

IAS and IFRS in 2024 Learn about the changes concerning the International Accounting Standards and the International Financial Reporting Standards applicable in 2024.

The International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) constitute a set of rules and guidelines concerning the preparation and presentation of financial statements by business entities. The main purpose of the IAS/IFRS is to ensure the comparability of business entities originating from various countries and industries within the scope of their situation. Above all, the standards include information about what a particular asset is, when a specific item, transaction or event needs to be recognized in the balance sheet and when in the financial result as well as how they should be evaluated upon the initial disclosure and as of the balance sheet date.

The development and updates of the IAS/IFRS is managed by the International Accounting Standard Board that regularly introduces changes and improvements in the existing standards in order to adjust them to the everchanging economic, legislative and technological circumstances.

The most important change concerning the International Accounting Standards in 2023 is the new IFRS 17 and the new Regulation of the European Commission (EU) 2023/1803 of 13 September 2023 that became effective on 16.10.2023. It includes a set of other implemented changes in the IFRS and clarifies the guidelines of those standards as well as specifies the conditions for exemptions or useful simplifications that can be helpful for those who prepare financial statements.

The most important changes introduced in IFRS 17 and the regulation of the EU Commission

1. The new IFRS 17 was issued in order to provide a better transparency and comparability of financial statements and it has a great influence on all entities conducting business activity in the insurance sector, including banks. One needs to bear in mind that the new standard does not refer only to insurance companies – companies conducting non-financial activities also should analyze the agreements for elements of a definition of an insurance agreement. IFRS 17 changes the rules for valuation and calculation of profits and losses in each settlement period and introduces big changes in the reporting of insurance contracts.
2. A significant percentage of business entities will be affected by the change made in IAS 1 i.e., the requirement of disclosure of “significant” information regarding accounting principles replaced with the requirement for information that is “relevant”. Here, one needs to highlight the different requirements in scope of disclosure of accounting policies as well as the supplementing guidelines within the scope of classification of obligations as long-term or short-term, which is crucial to all entities that have credit liabilities and related covenants.
3. Another large change that took place in 2023 is the change regarding IAS 12 “Income tax”, namely the introduced obligation to disclose the deferred tax on specific transactions and the introduced exemption from tax determination due to changes in tax regulations concerning the global minimum tax.

Author: Sylwia Kulczycka – Accounting Manager, accounting outsourcing office in Warsaw.

How can we help you?

The experts at MDDP Outsourcing can help you with the implementation of the IAS/IFRS guidelines:

• Ongoing consultancy in the scope of the IAS.
• An analysis of criteria for the application of the IAS.
• Adjustments of financial statements of IAS/IFRS regulations and follow-up changes.
• Recommendations for changes in the account plans and application of proper tools.
• Preparation of an accounting policy according to the IAS/IFRS.
• Consultations, training and ongoing advice within the scope of the standards.

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