International accounting standards witness rapid changes. Accordingly, business entities are urged to engage professional accounting firms to assist them with implementing the same.
In this context, the IASB issued several new International Financial Reporting Standards and amendments to the existing standards, which business entities should adopt by their respective effective dates.
The critical International Financial Reporting Standards include IFRS 9 Financial Instruments. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.
In the State of Kuwait, the Ministry of Commerce & Industry issued the Ministerial Resolution No. 603 of 2017 regarding application of the IFRS 9 “Financial Instruments”, which will come into force by 1 January 2018.
Furthermore, IFRS 15 “Revenues from Contracts with Customers” was issued and replaces IAS 11 “Construction Contracts” and IAS 18 “Revenues”. IFRS 15 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers. This core principle is achieved through a five-step model framework, i.e. identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when the entity satisfies a performance obligation.
Services provided by Baker Tilly
- Gap analysis to identify the current situation and the requirements of standards;
- Assess the impact of the adoption of standards;
- Assist our clients with developing accounting policies and procedures for appropriate adoption of the standards;
- Develop roadmap for the adoption of standards;
- Support our clients in the adoption phase; and
- Provide training courses tailored to each client’s requirements to address the adoption mechanism of the required standards.
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