9am Lowdown: IFRS17 & the cost of Brexit

9am Lowdown
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New accounting standards and the cost of Brexit features in this morning’s lowdown.

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New accounting standards launched

New accounting standards on insurance accounting are set to be issued today after 20 years of development.

The International Accounting Standards (IASB) has designed IFRS17 to simplify insurer’s financial statements. ACCA said the scope of the standard is limited because it applies to a restricted number of insurance companies.

Richard Martin, ACCA’s head of corporate reporting, said: “Despite the long development period not all parties may be content with all aspects of the new standard. Though we think that all should recognise that consistent accounting treatments will be a major advance, and the imperfections perceived by some are an inevitable price that has to be paid.”

Martin said the standard setters such as FRC will have to consider adapting their standards in the direction of IFRS17.

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Brexit calculated from £5bn to £30bn

The EU exit charge ranges from as little as £5bn to a maximum cost of £30bn, with a central scenario calculated at £15bn, according to a new report from the ICAEW.

The Analysing the EU Exit Charge took into account three components of a potential Brexit bill in March 2019: settling the UK’s accounts, this includes its share of the EU’s balance sheet; authorised spending by the EU not yet incurred; and committed spending for EU programmes between 2014 and 2020.

Taking the central scenario, the ICAEW determines the cost to be equivalent to £225 per person living in the UK.  However, ICAEW president Michael Izza said in a blog the amount the UK pays after its departure will be “a matter of negotiation” and said both sides should agree on the bill “sooner rather than later”.

He added: “Although the exit charge is the subject of much discussion at the moment, we must remember that the trading relationship between the UK and the EU will have a much more significant impact on the UK economy in the long run.” 

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About Richard Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.

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