Erkki Liikanen of the IFRS Foundation delivered a speech at the Eurofiling Conference 2019 in Frankfurt. He addressed the audience on whether digitalization will deliver increased productivity to the global economy and how the IFRS Foundation is undertaking its own digital transformation. He also mentioned that the IFRS Foundation has recently signed-off on a long-term plan to completely overhaul its technology systems and to establish a roadmap for the digital experience to be offered to stakeholders worldwide.
Mr. Liikanen discussed the work of the IFRS Foundation with respect to technology and digitalization. The Foundation has played an important role in the digital reporting space, by providing the IFRS Taxonomy to support the electronic filing and consumption of IFRS-compliant financial information. Regulators worldwide have started to fully embrace electronic filing, with the IFRS Taxonomy being used in Chile, Peru, Mexico, South Korea, South Africa, Australia, and the US. Earlier this month, EC finalized its proposals to require listed companies that prepare consolidated financial statements using IFRS Standards to tag their primary financial statements using the IFRS Taxonomy for financial years, starting on or after January 01, 2020. The requirement is part of the EC’s move to the European Single Electronic Format, an electronic format for EU annual financial reports introduced to support accessibility and transparency of financial information. This is excellent news in the move toward achieving the full benefits of electronic reporting and these benefits will be realized with global adoption of the IFRS Taxonomy.
He also noted the U.S. SEC's previous decision to allow the use of the IFRS Taxonomy by non-US companies listed in the United States', using financial statements that reflect IFRS Standards. This includes both detailed tagging of both the primary financial statements and the notes to the primary financial statements. The tagged data is now available and used by the IFRS Foundation in empirical research underpinning standard-setting. These are important steps in building the institutional infrastructure, added Mr. Liikanen. The IFRS Foundation is part of that infrastructure and it recognizes the importance of its role in developing and maintaining a high-quality IFRS Taxonomy.
IASB has recently appointed a staff person to lead its technology-related standard-setting work. As part of this work, the Foundation will continue to explore how technological developments affect the way financial information is consumed and what this means for the IFRS Taxonomy strategy, in addition to exploring how technology-related innovations affect the standard-setting process. He further highlighted that the IFRS Foundation is about to embark on its own digital transformation. During the last Trustees’ meeting, a long-term plan for the IFRS Foundation to completely overhaul its technology systems has been signed-off and, with it, a plan to establish a roadmap for the digital experience to be offered to stakeholders worldwide. Mr. Liikanen noted, “... we call this a business process and technology program, recognizing that benefits come not just from technology, but also come from rethinking our business processes to deliver enhanced value to our stakeholders around the world. It’s a three-year program of investment, but we’re excited about its potential. Recognizing the importance of this initiative, we have formed a permanent Trustee subcommittee on technology to oversee the program.”
Keywords: International, Accounting, Banking, Insurance, Securities, Reporting, IFRS Taxonomy, ESEF, Fintech, Digitalization Roadmap, EC, IFRS
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