Internal:Training/IFRS17/Why insurance broke global standards: Difference between revisions
Content deleted Content added
Created page with "{{Internal:Training/IFRS17/nav-dropdown}} 🔗 '''Recall.''' In the previous page, you learned how an insurer's balance sheet is dominated by reserves and how its income statement raises hard questions about when revenue is earned and how to value an uncertain promise. Now we build on that by exploring why those hard questions led different countries to radically..." |
No edit summary |
||
Line 25:
📜 '''The birth of a global project.''' The idea of a single set of [[Definition:Accounting standards|accounting standards]] for the entire world took shape in the 1970s with the creation of the [[Definition:IASC|International Accounting Standards Committee (IASC)]], later reorganised as the [[Definition:IASB|International Accounting Standards Board (IASB)]]. The goal was ambitious: if companies in every country reported their finances using the same rules, investors could compare a Belgian bank with a Japanese manufacturer on a level playing field. By the early 2000s, this vision was becoming reality. The European Union mandated that all [[Definition:Listed companies|listed companies]] adopt [[Definition:IFRS|International Financial Reporting Standards]] from 2005 onwards, and over 140 countries eventually required or permitted their use.
<div data-wix-module="ifrs-timeline" data-wix-events='[
{"year":"1973","cat":"ifrs","title":"IASC founded","body":"The International Accounting Standards Committee is created..."},
{"year":"~1997","cat":"ins","title":"Insurance project begins","body":"The IASC starts work on an insurance accounting standard..."},
{"year":"2001","cat":"ifrs","title":"IASC becomes IASB","body":"The IASB replaces the IASC..."},
{"year":"2004","cat":"ins","title":"IFRS 4 issued (interim)","body":"The IASB issues IFRS 4 as a stopgap..."},
{"year":"2005","cat":"ifrs","title":"EU adopts IFRS","body":"The EU mandates IFRS for all listed companies..."},
{"year":"2010","cat":"ins","title":"First exposure draft","body":"First full proposal for replacing IFRS 4..."},
{"year":"2013","cat":"ins","title":"Revised exposure draft","body":"A substantially revised proposal is published..."},
{"year":"May 2017","cat":"ins","title":"IFRS 17 published","body":"The IASB publishes IFRS 17..."},
{"year":"Jan 2023","cat":"ins","title":"IFRS 17 takes effect","body":"Insurers worldwide begin reporting under IFRS 17."}
]'>Loading…</div>
🏗️ '''Standard by standard.''' The IASB tackled industries one at a time, issuing standards for [[Definition:Revenue recognition|revenue recognition]], [[Definition:Financial instruments|financial instruments]], [[Definition:Leases|leases]], and more. Each new standard replaced the local rules that had previously governed that topic, bringing consistency across borders. A [[Definition:Revenue|revenue]] transaction in Italy would be accounted for the same way as one in Germany or Japan. The programme worked well for most industries, but insurance proved to be a stubborn exception. The fundamental problem was the one you explored in the previous page: insurance [[Definition:Revenue|revenue]] and [[Definition:Liabilities|liabilities]] are deeply tied to uncertain future events, and reasonable experts could not agree on how to measure promises that might not be settled for decades.
| |||