Accountants get schooled on new standard of practice
Atechnical workshop on improving the quality of financial reporting, allowed members of the Fiji Institute of Chartered Accountants (FICA) to learn more on a new standard of practice, known as IFRS 18.
The International Accounting Standards Board (IASB) expects to release the final version of IFRS 18 in the second quarter of 2024. IFRS 18 aims to improve the quality of financial reporting in three key areas :
■ Comparability by requiring presentation of defined subtotals in the Statement of Profit or Loss, including “Operating Profit” and “Operating Profit before Financing and Tax”. These subtotals are supported by guidance on how to classify income and expenses as operating, investing or financing.
■ Provide greater transparency around management-defined performance measures (MPMs). These are restricted to information communicated publicly, outside of financial statements, including ambiguous terms like “adjusted profit” which may be defined differently across entities.
■ Enhance the usefulness of disclosures through aggregation and disaggregation, considering materiality as well as the importance of using meaningful descriptions to label line items.
The workshop was facilitated by seasoned academic and a member of the FICA Standards Committee, Nacanieli Rika.
Mr Rika said participants’ prior knowledge about IFRS 18 was considerably low, since only 15 per cent knew any of its requirements before the workshop.
The remainder had either never heard of IFRS 18 (15 per cent), didn’t know that it covered presentation and disclosure (41 per cent) or knew its name but not its content (29 per cent).
Participants identified disclosure of MPMs as the most challenging aspect of the standard (52 per cent), followed by classification of expenses (24 per cent) and requirements for aggregation/disaggregation (13 per cent).
Based on knowledge acquired at the workshop, 30 per cent of the participants anticipated that their organisation and clients would find IFRS 18 difficult to adopt, while 46 per cent do not anticipate difficulties and 24 per cent are undecided.
A total of 150 accountants and auditors from various sectors of the economy attended the workshop at Shangri-la Yanuca Island.