Business leaders from across Kuwait gathered together at an ACCA event this week (14 February) to discuss IFRS 15 and its impact on Revenue Recognition, along with the impending introduction of VAT.
The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) published their new converged standard on revenue recognition in May 2014. The standard will be effective for periods beginning on or after 1 January 2018 and therefore poses a number of early adoption challenges both locally in Kuwait and globally.
Alongside this, the impending introduction of VAT expected from 1 January 2018 is set to bring further fiscal reform which businesses in Kuwait need to prepare for now in order to adopt VAT when implemented in ten months (based on the threshold and specific exemptions).
Fahim Bashir, Director from KPMG Kuwait was one of several business leaders in attendance who shared further insight on how businesses in Kuwait can start to undertake the pre-implementation process now in order to promote VAT readiness within their organisations.
Fahim Bashir, Director at KPMG Kuwait stated:
“All businesses should carefully review their processes to understand the impact of VAT and to determine what needs to be done to be fully compliant with the proposed laws. VAT will impact all businesses in the GCC, either directly or indirectly and, as a transaction-based tax, will impact all aspects of business. Finance, legal, IT, sales, marketing and even human resources teams must understand the impact of VAT on their functioning and determine whether the introduction of VAT will result in additional costs, which could be actual or cash flow or compliance-related.”
Hussam Negm, Founder of Synergy Consulting also addressed the audience sharing his technical expertise on the adoption of IFRS 15 and its impact on revenue recognition. During the event he discussed the associated changes resulting from the adoption, and the impact it will have on the future of businesses across the region.
Lindsay Degouve de Nuncques, head of ACCA Middle East stated:
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“Although the standard and VAT will not be effective until 1 January 2018, finance professionals are advised to start thinking of the challenges earlier on to ensure they are addressed prior to the adoption date. This will enable a smoother transition and ensure that key accounting principles and VAT processes are aligned to international standards, that are resistant to fluidity in the Kuwait market.”
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About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com
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© Press Release 2017
