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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By l3na
21st Nov 2017 13:42

The remain (in the EU) camp also said that the economic roof would fall in the next day, if we voted to leave.

It didn't.

Fact is, if things worth doing were abandoned because it got too hard then you guys wouldn't have made it to the moon.

As the freelance essay typer in political economy I'd say the EU was always going to make it very difficult. If they don't, others may get grand ideas about leaving.

The terms of the parting are only part of the picture. The EU is undemocratic and wasteful and aiming to homogenise Europe. It has grand plans that appear to have no purpose; why aim to make the whole of Europe a single entity and tell everyone how much tax they can raise and how they are allowed to spend it? What is the purpose in that? They bleat on about the EU restoring peace in Europe but the fact is we all learned lessons out of the 20th century wars and we are all a good deal more civilised and pragmatic. Britain is well out of Europe not so much because of what the EU is today but what it is likely to become in 15-20 years' time.

And if it's difficult then let's not let that stop us because after 2019 you can be sure the exit door will be closed and sealed forever.

And, finally, no-one in the world, not anyone currently walking the face of the planet, is able accurately to predict how it will turn out. It's all conjecture and opinion. Mine is that it will be well worth the pain.

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