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Accounting landscape subject to regulatory changes
An increasingly globalised and complex business environment will require many firms to change their accounting practices. How can firms best prepare?
New regulations will require tech-savvy accountants.
No accountant is exempt from regulation and as businesses become more globalised and look into new markets, they must have a strong financial team that understands the environment.
A number of changes are expected to significantly affect the way that accounting and financial functions perform, meaning firms must look into new strategies to mitigate the shifts.
KPMG weighs in on IASB standards
The International Accounting Standards Board recently released a new accounting standard for leasing after 30 years of the same worldwide regulations.
According to the organisation, over 85 per cent of lease commitments do not appear on a company's balance sheet, due to a categorisation between 'finance leases' or 'operating leases'. However, the new system will remove this distinction to make these commitments more transparent and easier for investors to understand the company.
Brian O'Donovan of KPMG's International Standards Group explained that while the new standards are less complex and costly to reply, there are still important considerations to be made in the transitional period.
"For some companies, a key challenge will be gathering the required data," he said. "For others, more judgemental issues will dominate, for example, identifying which transactions contain leases."
Navigating these changes to see success requires the right personnel in a company to respond appropriately to any new regulations.
APAC to prepare for major regulatory changes
The changes in the regulatory environment are unlikely to be limited to leases alone. Deloitte recently released its predictions into the factors that will most affect companies in the Asia Pacific region. The top three forces for firms to take on were resilience, culture and conduct and technology.
Changing policies will have an impact on an individual company's responsibilities and requirements.
Deloitte predicts that there will be continued changes to capital requirements and total loss-absorbing capacity (TLAC). Changing policies will have an impact on an individual company's responsibilities and requirements.
Lead Partner of the Deloitte Asia Pacific Centre for Regulatory Strategy Kevin Nixon explained the importance of strong technology skills in adapting to the challenges in the region.
"APAC financial institutions will continue to face elevated implementation challenges within an ongoing policy environment that has significant strategic implications," he explained.
"Digital innovation will play a major role in altering the environment for delivery of financial services."
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By Andrew McPherson