Global IFRS Insurance Survey 2018

Article

All hands on deck

IFRS 16 Leasing Assets and the end to Off-Balance Sheet Financing

The new lease accounting standard, IFRS 16, will bring all leasing assets on-balance sheet, which may significantly affect companies’ key performance indicators, loan covenants and regulatory capital requirements.

Key Takes-outs:

1. Do you know which of the entity’s contracts are, or contain, leases?

2. Are your systems and processes capturing all of the required information?

3. Are systems and processes capable of monitoring leases and keeping track of the required ongoing assessments?

4. Have you considered the use of IFRS 16’s recognition exemptions and practical expedients?

5. Do you know which transition reliefs are available, and whether you will apply any of them?

6. Do you know what discount rates you will be using for your different leases?

7. Have you considered the impact of the changes on financial results and position?

8. How will you communicate the impact to affected stakeholders?

9. Have you planned when you will consider the tax impacts?

10. Have you considered whether your leasing strategy requires revision?


How can Deloitte help?

With the looming effect of the new leasing standard around the corner, Deloitte has introduced a proprietary tool for leasing. The Deloitte developed technology enhances the extraction of relevant data from lease contracts, maintains and stores historical records, automatically calculates the impact in terms of the requirements of IFRS 16 and generates the financial accounting journal entries for the client’s reporting systems.

Global IFRS Insurance Survey 2018

About the survey

Deloitte commissioned the EIU to conduct a global survey of 340 senior insurance executives and obtain the perspectives of a number of industry professionals in February and March 2018, to access insurers' views on the scale and complexity of the implementation challenge.

The geographical coverage of respondents includes Canada, the UK, France, Italy, Germany, Japan, Switzerland, Spain, the Netherlands, China, South Korea and the US. The survey covers a wide range of insurance businesses, including life, non-life, composite, health and reinsurance companies, of varying size measured by net written premium to ensure our insights are representative of the views of all insurance companies subject to IFRS regulations.

The 2018 survey is the third in a series tracking the insurance industry's journey and sentiment towards the adoption of IFRS 17. The first, Winning the waiting game?, was released in 2012, while the second survey, Gaining momentum, was published after the International Accounting Standards Board (IASB) released the second exposure draft on the new IFRS on insurance contracts in June 2013.

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