Staff Reporter :
Bangladesh is in a critical juncture for graduating to a middle income country by 2026 and it is imperative that financial reporting in the insurance sector is done in accordance with the International Financial Reporting Standards (IFRS).
Financial Reporting Act, 2015 requires that financial statements of public interest entities to which the insurance industry belongs to are prepared in accordance with IFRS.
The Institute of Chartered Accountants of Bangladesh (ICAB) being the premier accountancy body in Bangladesh is ready to help this transition to “IFRS 17: Insurance Contracts” can play vital role in successful implementation of the standard.
Experts came up with the remarks at the seminar on “IFRS 17-Insurance Contracts: Overview, Implementation Challenges & Way Forward” organized by the Institute of Chartered Accountants of Bangladesh (ICAB) at Pan Pacific Sonargaon Hotel in Dhaka on Sunday.
Mohammad Jainul Bari, Chairman of Insurance Development and Regulatory Authority (IDRA), said that they would pay more attention to the compliance with IFRS 17.
“As soon as this standard becomes effective next year, insurance companies in Bangladesh need to prepare their financial statements according to the standards,” he said.
Implementing the standard, he sought cooperation of various stakeholders including ICAB and FRC in implementation of IFRS-17: Insurance Contracts.
Compliance with the standard will increase transparency and accountability in the insurance sector of the country and enable companies to gain public trust as well, he added.
He informed that in the year 2010, there was an insurance law enacted in the country.
“IDRA is working on making the regulations to implement this law and we IFRS 17 will help bring about fundamental changes in the insurance sector, although there are challenges,” he said.
ICAB President Md Shahadat Hossain said that the insurance companies are the large investors in financial markets.
So, the growing linkage between the insurers and the banks is considered as safeguard of financial stability of the country, he said adding, “The transparency delivered by accounting standards in this sector is a crucial tools for sustainable growth.”
The International Accounting Standards Board (IASB) has issued “IFRS 17 Insurance Contracts “which is going to be effective from 1 January 2023 for annual reporting periods beginning on or after 01 January 2023, with early adoption permitted in certain circumstances.
The standard will ensure the entities providing relevant information which faithfully represents the recognition, measurement, presentation and disclosure principles for insurance contracts within its scope, he said.
Such information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows, he added.
ICAB’s Council Member and Past President Md Humayun Kabir, Vice President Fouzia Haque and chairmen, managing directors, Chief Executive Officers, and Directors of Life and Non-Life Insurance Companies participated in the seminar and exchange their views.
