The International Financial Reporting Standards, also known as the IFRS, are the standard accounting reporting standards used around the globe. All public companies are required to present their annual accounts to the investors and to the general public, and they must be prepared while keeping the financial reporting standards in mind. Trained accountants are responsible for making sure that the financial statements are prepared in line with the IFRS and the ISAs. There are several standards which are used for preparing the accounts, and each of these deal with a different part of the reporting procedure. Many companies in Thailand are required to provide their financial statements in line with the IFRS as well.
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What’s IFRS 17?
IFRS 17 is going to be effective for all companies beginning from January 1, 2021, and earlier application is permitted as long as companies also use IFRS 9 and 15. The title of the IFRS is Insurance Contracts, and as you can imagine, it deals with different kinds of insurance contracts that are made between companies. Insurance contracts usually contain features from not just financial instruments, but also service contracts, and as a result, they have to be separated from either. On top of that, many insurance contracts generally produce cash flows over a considerable period of time, and there’s substantial variability between the cash flows as well. As a result of that, IFRS 17 combines the measurement of current cash flows while recognizing profit over the period that the services have been rendered.
On top of that, it also presents the service results from the insurance company separately from the finance income or expense registered under the insurance contract. Not only that, but the IFRS also requires entities to make accounting policy choices depending upon whether they should recognize all finance income or expense or recognize some as a separate income head and the remaining under other comprehensive income.
Automation
Now that you have a basic idea of the IFRS, it’s important to talk about automation. Most of the companies in Thailand simply make use of software programs when preparing their financial accounts. Using an IFRS 17 software in Thailand is a fantastic idea for business owners. There are plenty of different software programs that are designed for use with various businesses. It’s incredibly important for business owners to invest in a software program that was custom designed for use and is a suitable choice for them. It’s crucial for business owners to ensure that they automate simple processes in the industry.
If you are interested in investing in an accounting software program, there are many options available in the market. Make sure you read about the after-sales support offered by the company and whether the software can be adapted to operate as per the requirements of the industry your company is in. These are just a few simple things that you should know about investing in a software program for preparing insurance contracts for their companies.
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