New UK accounting body faces first big test with insurers

1 min


153
92 shares, 153 points

The Canary Wharf financial district is seen in east London November 12, 2014. REUTERS/Suzanne Plunkett

LONDON, Oct 14 (Reuters) – Britain’s new body overseeing accounting rules following Brexit said it was braced for a “lot of noise” from the 1.7 trillion pound ($2.33 trillion) insurance sector about measures to increase transparency of financial positions and performance.

Departure from the European Union meant Britain had to set up its own body to endorse international accounting rules, a task previously undertaken by Brussels, with the first big test next month involving insurance accounting rule IFRS 17.

Pauline Wallace, a 30-year veteran in accounting who is interim chair of the UK Endorsement Board (UKEB), said the body will consult in November on endorsing the rule which comes into force globally in January 2023.

“We are running against quite a tight deadline,” Wallace told Reuters.

The UKEB must take into account the long-term impact of an accounting rule on the UK economy and its competitiveness compared with Europe and elsewhere, with government keen for Britain to bolster its attractiveness as a global investment centre following Brexit.

IFRS rules are written by the International Accounting Standards Board (IASB) for use in over 140 jurisdictions and are endorsed at the national level for use.

IFRS 17 represents one of the biggest changes for insurers in decades, shining a light into a “black box” of balance sheets whose opaqueness has put off many investors.

Wallace said the consultation will ask if IFRS 17 should be applied as written by the IASB, adding that she has not heard any calls for major ‘carve outs’.

“We can also not endorse. That is the nuclear option. I don’t think that’s anything anybody wants,” Wallace said.

She expects a “lot of noise” from industry, especially over the treatment of with-profits funds.

“The insurance industry is very good at making their views known. Insurance companies are not the only stakeholders in this. Investors are very keen to see better accounting in insurance,” she told Reuters.

The Association of British Insurers said it had no comment on IFRS 17 at this stage.

Following heavy lobbying from Europe’s insurance sector, the EU is putting some contracts into shorter time brackets, a key demand from insurers in southern Europe.

Wallace said she was not hearing calls for a similar move in the UK.

($1 = 0.7291 pounds)

Reporting by Huw Jones;Editing by Elaine Hardcastle

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters


Like it? Share with your friends!

153
92 shares, 153 points

What's Your Reaction?

Cute Cute
18
Cute
Fun Fun
10
Fun
Hate Hate
5
Hate
Confused Confused
21
Confused
Fail Fail
13
Fail
Geeky Geeky
8
Geeky
Love Love
26
Love
OMG OMG
21
OMG
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format