Leadway Assurance Advances Limited has announced its progress in implementing the International Financial Reporting Standard (IFRS) and its commitment to adhering to the guidelines set forth by IFRS 17. Developed by the International Accounting Standards Board, IFRS 17 is a new reporting standard aimed at standardizing insurance accounting practices globally. The implementation of this standard is scheduled to come into effect from January 1, 2023.
The objective of IFRS 17 is to provide a uniform framework for reporting profit emergence from insurance contracts, allowing users of financial statements to make meaningful comparisons between companies, assess their historical performance, evaluate their current financial position, and understand their risk exposure.
During a workshop organized by Leadway Assurance Advances in Lagos, Nigeria, for the Nigerian Association of Insurance and Pension Editors, Mr. Raphael Akomolede from the Finance Department discussed Leadway’s progress in implementing IFRS 17. He revealed that the company has completed various crucial steps, including solution design, financial and operational impact assessment, analysis of the future state of finance process and technology gaps, development of a target operating model, preparation of technical documents, and vendor selection for IFRS 17.
Akomolede further stated that Leadway Assurance is currently engaged in simultaneous activities such as system testing and implementation, reviewing and producing financial positions for 2021 and 2022, and generating interim IFRS 17 compliant financial statements with transition disclosure.
Highlighting the shortcomings of the previous standard, IFRS 4, Akomolede explained that IFRS 17 aims to address issues related to inconsistent accounting practices for insurance contracts. Under IFRS 4, insurers were allowed to use local Generally Accepted Accounting Principles, making it challenging for investors to determine the profitability of specific groups of contracts.
The implementation of IFRS 17 is expected to bring several benefits, including improved comparability, updated measurement of insurance contract liabilities, enhanced presentation of financial performance and position, increased disclosure and transparency, and clear differentiation between insurance and investment activities.
Akomolede acknowledged the efforts of the National Insurance Commission in Nigeria for its commitment to implementing IFRS 17 in the insurance industry. He praised the commission’s dedication since 2019 to ensure the full adoption of IFRS 17 within the Nigerian insurance sector.
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