The Forum brought together 25 participants from 9 countries from the Western Balkan, the Black Sea, and the South Caucasus regions. The Executive IFRS Forum for Regulators aims at providing updates to  financial and prudential regulators on : (i)accounting standards, (ii)sustainability standards, and (iii) standards setters’ work program. Standards setters considered include the International Accounting Standards Board (IASB), the International Sustainability Standards Boards (ISSB), and the European Commission in these areas (EU IFRS regulation, Accounting Directive, and Corporate Sustainability Reporting Directive (CSRD), and European Sustainability Reporting Standards (ESRS) developed with EFRAG assistance).

More specifically, the 9th Executive IFRS Forum for Regulators aimed at (i) providing an update on IFRS Standards, such as the new standard IFRS 18 – Presentation and Disclosures in Financial Statements, and implementation of IFRS 9 – Financial Instruments and IFRS 17 – Insurance Contracts; (ii) discuss sustainability reporting requirements in the EU and how this information is making its way in financial statements disclosures and , (iii) provide insights on how financial and regulatory data can be transferred with modern tools from supervised entities to regulators for their review and analysis.

Bruce Mackenzie, Board Member of the IASB, presented the work of the board for 2024 and 2025. As of January 31, the Board was working on 20 different projects, including possible amendment to IFRS 9 – Financial Instruments regarding amortized costs. Modification to IFRS 9 should be issued as early as Q2 2025. The IASB issued also new standards including IFRS 18 – Presentation and Disclosures. Under IFRS 18, two new subtotals are required for harmonizing the presentation of the statements of performance of IFRS reporting entities: operating profit and profit before financing and income tax. IFRS 18 also provides guidance on what should be disclosed in the notes and what should be in the primary financial statements, and guidance on aggregation and desegregation of individual line items in the primary financial statements.

Friedrich John, FMA Bank Senior Supervisor,  presented a study on the financial statements of 15 banks that are overseen by the FMA. The study considered the banks’ 2023 annual report to assess their level of disclosure on ESG matters. Most of the banks apply GRI standards, while one bank applied the new ESRS.  in addition to GRI. Four banks added a reference to other international reporting standards. The transposition of the CSRD is delayed in Austria and will be transposed only in 2025. Under the directive, all listed entities above a certain size will need to report under ESRS.

Michal Piechocki, Vice President Regnology, made a case for using technology to simplify reporting, as many of the requirements at the EU level are requiring information using overlapping data. Because of this, there is a risk that companies have multiple reporting systems using the same sets of data. While a simplification of the reporting requirements would be ideal, technology using comprehensive databases and applying rules to overlapping sets of data may be able to simplify reporting and limit the number of reporting tools needed.

Darrel Scott, in his capacity as a consultant of the World Bank, presented the results of regulatory reviews across several countries on the implementation of IFRS 17 Standard – Insurance contracts. Overall, regulators in Europe (UK Financial Reporting Council and the European Securities and Market Authority) concluded positively that the disclosure requirements have been generally well covered but pointed to the need for more entity-specific details in some areas. Darrel also presented technical details about the standards and its first application. Countries in the Western Balkans have yet to implement the IFRS 17 Standard – Insurance contracts.
Finally, Edward Vakhtangishvili, Senior Insurance Supervisor,  presented the implementation of IFRS 17 in Georgia. At the end of 2023, 18 insurance companies were operating in Georgia and were licensed to operate in both life and non-life insurance lines of business. Life insurance is mainly associated with banks’ lending activities and is considered short-term; the impact on equity and net profit of insurance companies in Georgia stemming from the implementation of IFRS 17 has been limited.

Feedback for this year’s Forum was very positive, with a global rating for the forum of 4.8 out of 5. Participants requested that the CFRR continue the Executive IFRS Forum activities, with a focus on financial instruments and insurance contracts accounting, and sustainability reporting.