RSM Albazie & Co., a member of the sixth largest network of independent audit, tax and consulting firms ‘RSM International’, recently hosted an International Financial Reporting Standards (IFRS) seminar for its key clients at Marriott Courtyard.
The intensive two-day seminar was conducted by Peter Thatcher, a UK-based specialist in IFRS training courses and Chandra Sekaran, partner at RSM Kuwait who has more than 25 years of experience delivering IFRS training programs across the world.
Accounting professionals from corporate entities such as Commercial Bank of Kuwait, KFH Capital Investment Co., Kuwait Business Town Real Estate, KCPC, Oula Fuel Marketing, Al Mazaya Holding Co., KIPCO, KAMCO, Securities Group Co along with key personnel from RSM Albazie & Co were able to discover and understand the changes and modifications in the IFRS framework which witnessed updates in the following sections:
- IFRS 9 - Financial instruments
- IFRS 13 – Fair Value Measurement
- IFRS 15 - Revenue from Contracts with Customers
- IFRS 16 - Leases
During the seminar, Peter Thatcher, the main speaker, highlighted the major practical challenges that companies in Kuwait may face when they implement these new IFRS in 2018 and 2019. In particular, IFRS 9 is likely to have the greatest impact on financial institutions. These companies were advised to consider carefully the classification of their investments, which may need to be valued on a different basis, and the impact on their annual profits, which may become more volatile year on year.
Annual profits of financial institutions may also be affected by the new approach to recognizing the risk of their loan assets not being collected as expected. IFRS 15 may impact the timing of revenue recognition in companies’ income statements which may, in turn, affect reported profits. Companies operating in the construction and software development industries are among those most likely to be affected. The new IFRS 16 will affect all companies who lease assets as it will require those companies to recognize assets and liabilities that have previously remained ‘off-balance sheet’.
Both speakers highlighted the importance of companies getting ready for the practical and financial reporting consequences of these changes as early as possible and to engage with their stakeholders through normal communication channels.
As per the ministerial decree of Kuwait, IFRS needs to be followed by all the companies incorporated in Kuwait. Commenting on this occasion, Dr. Shuaib Shuaib, Managing Partner at RSM Albazie & Co said: “The International Financial Reporting Standards (IFRS) is both globally and locally the most accepted accounting framework today. It is imperative that our clients and our key personnel at RSM are are up-to-date with the new developments within the framework”.
RSM Albazie & Co has worked with clients from various industries which include, Banks Construction and Real Estate, Hospitality, Aviation, Oil and Gas, Banking and Financial Services and Healthcare amongst others. Established in 1963, RSM Albazie & Co. is considered to be among the oldest accounting and advisory firms in Kuwait, with more than 50 years of experience.