Everything You Need to Know About the 2024 IFRS Updates

Professional accountants know that depending on your company's industry, location and business relations, all financial proceedings must adhere to standardized rules.  

Currently, the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) are the two most common standards followed by the majority of companies and governments who are doing business both within their locality and in foreign countries. 
 
The IFRS, which was developed by the International Accounting Standards Board (IASB) based in London helps to bring consistency, transparency and efficiency to financial statements worldwide. To be true to this mandate, the IASB makes sure to keep the standards up to date with current times.  

If you are in the European Union, Canada, India or any of the countries listed here or if you are doing business with any entities within these countries, it is best for you to follow the International Financial Reporting Standards (IFRS) to ensure uniformity in all your financial proceedings.  
 

Read: Understanding the Basics of Accounting Rules for the European Union  

 
The Importance of Being Updated with the IFRS Standards 

The IASB acknowledges that their standards need to be regularly reviewed to stay relevant to the current economic atmosphere. Each year, the IASB reviews and updates the IFRS to address changes, solve emerging issues and just improve the quality of countries’ financial reporting processes overall.  

With this, they already rolled out the 2024 IFRS updates last May 2024 for entities to incorporate into their financial reporting processes. 
 
Here is a brief rundown of the 2024 IFRS updates you need to know:  

IFRS 17 Insurance Contracts 

Starting January 1, 2024, IFRS 17 will take the place of IFRS 4, bringing in a new way to account for insurance contracts. The main goals are to make accounting for all insurance contracts more consistent and to improve transparency and comparability. 

The standard requires insurance liabilities to be valued at their current worth rather than their past value, which inserts inflation considerations. This means insurers must frequently update their assumptions to match current market conditions. 

IFRS 9 Financial Instruments – Classification and Measurement Amendments 

The changes to IFRS 9 set new rules for how financial instruments are classified and measured. 

These updates aim to make it easier to classify financial assets and ensure the accounting matches the business model and cash flow characteristics of these assets. 

IFRS 16 Leases – Amendments on Sale and Leaseback Transactions 

The 2024 changes to IFRS 16 focus on sale and leaseback transactions, offering more guidance on how to account for them. These updates explain how to measure the right-of-use asset and lease liability in these situations. 

IAS 1 Presentation of Financial Statements – Classification of Liabilities 

The changes to IAS 1 explain how to classify liabilities as either current or non-current. They focus on the conditions needed for a liability to be non-current and give more details on when a company can delay paying off a liability. 

This gives companies and entities leeway when it comes to their financial obligations.  

IFRS 13 Fair Value Measurement – Disclosure Amendments 

The 2024 updates to IFRS 13 aim to improve the rules for sharing information about fair value measurements. The changes focus on giving more details about the methods and assumptions used in these measurements. 

What Do These Updates Mean? 

For companies and entities who comply with the IFRS in all their financial proceedings, these updates are angled towards helping you to be able to properly manage your finances and your financial records regardless of inflation, liquidity and business model.  

Upon review, these updated measures help secure the company’s financial standing, which can appeal positively to stakeholders. With this, it is important to be able to integrate these updates into your workflow as soon as possible – especially if the specific standards stated above apply directly to your finances.  

 
How Can Your Company Integrate These Changes? 

To ensure regulatory compliance for your company and reduce the risk for any penalties or challenges, it is best for you to develop a system for integrating these changes. How can you do this?  

 
Monitoring Updates 

The IASB regularly reviews the IFRS every November and January and releases updates on the said months. As a company, it is best to be proactive and regularly watch out for updates during these times. 

By actively monitoring IASB news and updates, your company can stay on top of regulatory requirements and integrate them into your processes in no time.  

Provide Employees with Training and Resources

To be able to integrate it into their workflows, it is important that you provide your employees with the proper resources and training to understand the updates made. Make sure your leadership team explains these changes and how they relate to each employee’s work so that employees can understand them immediately and comply with them.  
 
 
In the end, being able to remain compliant as a company is all about regular monitoring and application. Just the same as how the IASB takes the time to annually review their standards for relevance, it is best practice for your company to regularly review the rules and regulations that apply to you on an annual basis to see if there are any changes you need to make.  
 
By creating a proactive culture dedicated to adherence, you’ll be able to safeguard your company’s future and equip it with the necessary resources to navigate any market changes.  

Read Next: What are the 4 Types of Audit Reports and Opinions?  
 

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To help you with this, we have a wide expertise in handling the numbers of companies across various industries and broad experience in using top-of-the-line software to better handle your finances. Contact us today to get a free consultation from our experts!  

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