What is IFRS (International Financial Reporting Standards)

The Federal Executive Council (FEC) of Nigeria approved for adoption of International Reporting Standards (lFRS) for the preparation of Financial Statements  in  Nigeria with  effects from   1″ January,   2012. It is a mandatory and statutory requirement.

What are the benefitsof IFRS

It significantly improves the comparability of the Financial Statements of your organization with other companies within and outside the Country.

It provides more consistent,qualitative and quantitative information about the company.

It is intended to facilitate the movement ofcapital worldwide and provide clarity and consistency to financial reporting in the global market.

Draw Backs of IFRS

In the short term, the significant cost related to the conversion of and sustenance of IFRS reporting standards may make IFRS less efficient and cost effective as compared to retaining the local NGAAP.

In view of this shortcoming, the Nigerian Council of Registered Insurance Brokers intends to mitigate the cost effect of conversion of its members via the establishment of “Shared Service Scheme” for IFRS Conversion whereby all members pay some amount of money which is pulled together for the payment of consultants engaged by the Council to assist its members convert to IFRS.

What is the Role of External Auditors in IFRS Conversion

Management of Companies are expected to determine  the accounting pronouncements which the company must comply with in relation to IFRS. The External Auditor is required to attest to and substantiate management’s compliance with those pronouncements.

When are Insurance Broking Companies expected to adopt IFRS

Insurance broking companies/firms falls under the other “Public Interest Companies” according to the FRC Roadmap and are expected to mandatorily adopt IFRS not later than 31st December, 2013. Therefore, their financial statements for year 2013 must be compliant with IFRS.

What are the steps taken by NCRIB to ensure its members convert to IFRS

The NCRIB has engaged a consortium of IFRS Consultants to assist its members convert to IFRS. The Consultants are to provide members with IFRS reporting Template approved by NAICOM and FRC. The consultants will train its members’ accountants and auditors on IFRS conversion with the use of the template and also provide Help Desk facilities to assist members in case of any challenges in the course of Conversion of their financials.

Why is NCRIB involved in the project

The cost of conversion and compliant with IFRS is expensive and complex, that is, it would have cost average brokers between 2 Million and 6 Million Naira depending on the size of the broking company. As about 80% of our members are small operators, whose income is below 2 Million per annum. The NCRIB has engaged a consortium of IFRS Consultants after a thorough screening and negotiation by the Technical Committee of the Council.

The Governing Board of NCRIB approved the recommendation of the Technical

Committee which was eventually ratified at the October, 2013 Annual General Meeting by the General Assembly of members, hence, the N100, 000.00 levy to be paid by each member.

It significantly improves the comparability of Financial Statements of your organization