New international accounting standards are likely to have a major impact on the financial reporting of many issuers, according to the International Organization of Securities Commissions (IOSCO), which is calling on companies in a statement issued on Thursday to disclose the likely effects to investors.
IOSCO’s statement suggests that the three new International Financial Reporting Standards (IFRS) are expected to “significantly affect the financial statements of many issuers globally, given the breadth of their applicability.” Specifically, the new accounting standards that will impact the way companies report revenue, financial instruments and leases.
As a result, IOSCO is calling on issuers and their audit committees to ensure they’re making “full, accurate and timely disclosures of the possible impacts of adopting the new standards” on companies’ financials.
IOSCO stresses in its statement that it considers “the accuracy, integrity, and comparability of issuer disclosure to be essential for maintaining investor confidence and therefore facilitating a stable international financial system.”
Two of the new standards will take effect for annual periods beginning Jan. 1, 2018, and the other will apply to annual periods as of Jan. 1, 2019.