Compliance with IFRS-4 to revolutionise insurers' accounting system
Wednesday, 29 October 2008
FE Report
Preparing annual financial statement in compliance with the International Financial Reporting Standard (IFRS)-4 will help bring about revolutionary changes in the accounting system of insurance companies, speakers observed at a seminar in the city Tuesday.
They said introduction of the IFRS-4 will also benefit the insured, the insurers and the reinsurers, by ultimately improving the insurance accounting governance in Bangladesh.
The Institute of Chartered Accountants of Bangladesh (ICAB) organised the seminar on IFRS-4: Insurance Contracts.
Speaking as the chief guest, Commerce Secretary Feroz Ahmed said the issue of standard is very important for sustainable growth of the country's insurance industry.
Referring to the global financial woes, he said the standards set by the Westerners, in most cases, were not followed by themselves properly, which led to the collapse of a number of large financial organisations including some banks and insurance companies recently.
In spite of so many imperfections, he said: "Our financial institutions are still safe as they are under proper regulatory watch."
Blaming a section of Westerners and Europeans for the financial turmoil, Mahbubur Rahman, president of the International Chamber of Commerce-Bangladesh (ICCB), said they set standards but do not comply with those properly.
Mentioning a number of problems in the country's insurance industry, he said there should have some mechanisms to address those for sustainable growth of the sector but the mechanisms should not come into force overnight.
It might be considered whether there is a need of merger of some third generation insurance companies as those are failing to compete, he opined.
Presenting a keynote paper at the seminar, Shahadat Hossain, member council-ICAB, said the objective of the IFRS-4 is to bring about improvements in accounting for insurance contracts by the insurers.
It is also aimed at ensuring appropriate disclosure to identify and explain the amounts in insurers' financial statements arising from insurance contracts and help users understand the amount, timing and uncertainty of future cash flows from insurance contracts.
ICAB President Humayun Kabir in his welcome speech said the IFRS-4 is the first-phase development of the International Accounting Standard Board's project to develop an accounting standard to address the complexities and problems in preparing insurance accounting.
He further said the convergence of insurance accounting standards is going on to frame a single set of standards for application around the globe giving rise to a uniform set of accounting and auditing standards.
Around one hundred CA professionals attended the seminar with AKM Rafiqul Islam, former president of ICAB and also managing director of Pragati Insurance Company Ltd, in the chair.
Earlier, the commerce secretary unveiled the Volume-I of the Bangladesh Financial Reporting Standards at the seminar.
Preparing annual financial statement in compliance with the International Financial Reporting Standard (IFRS)-4 will help bring about revolutionary changes in the accounting system of insurance companies, speakers observed at a seminar in the city Tuesday.
They said introduction of the IFRS-4 will also benefit the insured, the insurers and the reinsurers, by ultimately improving the insurance accounting governance in Bangladesh.
The Institute of Chartered Accountants of Bangladesh (ICAB) organised the seminar on IFRS-4: Insurance Contracts.
Speaking as the chief guest, Commerce Secretary Feroz Ahmed said the issue of standard is very important for sustainable growth of the country's insurance industry.
Referring to the global financial woes, he said the standards set by the Westerners, in most cases, were not followed by themselves properly, which led to the collapse of a number of large financial organisations including some banks and insurance companies recently.
In spite of so many imperfections, he said: "Our financial institutions are still safe as they are under proper regulatory watch."
Blaming a section of Westerners and Europeans for the financial turmoil, Mahbubur Rahman, president of the International Chamber of Commerce-Bangladesh (ICCB), said they set standards but do not comply with those properly.
Mentioning a number of problems in the country's insurance industry, he said there should have some mechanisms to address those for sustainable growth of the sector but the mechanisms should not come into force overnight.
It might be considered whether there is a need of merger of some third generation insurance companies as those are failing to compete, he opined.
Presenting a keynote paper at the seminar, Shahadat Hossain, member council-ICAB, said the objective of the IFRS-4 is to bring about improvements in accounting for insurance contracts by the insurers.
It is also aimed at ensuring appropriate disclosure to identify and explain the amounts in insurers' financial statements arising from insurance contracts and help users understand the amount, timing and uncertainty of future cash flows from insurance contracts.
ICAB President Humayun Kabir in his welcome speech said the IFRS-4 is the first-phase development of the International Accounting Standard Board's project to develop an accounting standard to address the complexities and problems in preparing insurance accounting.
He further said the convergence of insurance accounting standards is going on to frame a single set of standards for application around the globe giving rise to a uniform set of accounting and auditing standards.
Around one hundred CA professionals attended the seminar with AKM Rafiqul Islam, former president of ICAB and also managing director of Pragati Insurance Company Ltd, in the chair.
Earlier, the commerce secretary unveiled the Volume-I of the Bangladesh Financial Reporting Standards at the seminar.