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The Impact of IFRS 17 on the Development of Accounting Measurement and Disclosure, in Addition to Improving the Quality of Financial Reports, Considering Compliance with the Requirements of IFRS 4—Jordanian Insurance Companies-Field Study

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  • Omar M. Alhawtmeh

    (Department of Accounting, Business College, University of Jordan, Aqaba 11733, Jordan)

Abstract

The research examines the impact of applying the IFRS 17 International Financial Reporting Standard on the development of accounting measurement and disclosure to improve the quality of financial reports when considering compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies. Achieving the objective, previous studies were examined which related to the impact of applying the IFRS 17 Financial Reporting Standard on the development of accounting measurement and disclosure for improving the quality of financial reports when considering compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies. Moreover, the researcher linked the theoretical aspect to the practical aspect. Therefore, the researcher designed a questioner, distributed, and then analyzed the results obtained from the relevant parties. The study found the need to conduct increased research related to the impact of adopting the IFRS 17 International Financial Reporting Standard in improving the quality of reports and overcoming obstacles such as current laws, professional qualifications of those preparing reports for insurance companies, and the situation of auditors. Including the IFRS 4 and IFRS 17 standards in the content of accounting courses can be beneficial for linking academic study with practical practice in several ways: Real-world application, Industry relevance, Compliance and regulation, Career opportunities, Evolving nature of accounting. The need to adjust accounting practices of the International Financial Reporting Standard IFRS 17 is an important step in the field of insurance activity to improve the quality of financial reporting. Owing to the fact that the standard has been allocated only to insurance activity and not to all economic operations, means the application of the standard is limited to all insurance contracts for the duration of contracts, regardless of the nature of the activity of the entity issuing those contracts. Therefore, the study recommends increasing attention on disclosure and improving accounting methods in relation to IFRS 17; this is considered a major step in the insurance business in order to improve the quality of financial reports. Additionally, relevant information is provided for financial reports and similar; this helps improve the level of transparency and quality of the information presented in the core of the reports. Thus, it enables companies to assess the impact of contracts about the current financial position, financial performance, and cash flow.

Suggested Citation

  • Omar M. Alhawtmeh, 2023. "The Impact of IFRS 17 on the Development of Accounting Measurement and Disclosure, in Addition to Improving the Quality of Financial Reports, Considering Compliance with the Requirements of IFRS 4—Jor," Sustainability, MDPI, vol. 15(11), pages 1-26, May.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:11:p:8612-:d:1155805
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    References listed on IDEAS

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    1. Costin A. ISTRATE & Dumitru BADEA, 2015. "The importance of the transition to IFRS for insurance companies in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(Special(I), pages 359-368.
    2. Klumpes, P. & Kumar, A. & Dubey, R., 2014. "Investigating risk reporting practices in the global insurance industry," British Actuarial Journal, Cambridge University Press, vol. 19(3), pages 692-727, September.
    3. Costin A. ISTRATE & Dumitru BADEA, 2015. "The importance of the transition to IFRS for insurance companies in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(Special(I), pages 9-21.
    4. Samira Demaria & Sandra Rigot, 2014. "IFRS Standards and Insurance Companies: What Stakes for Long-Term Investment? A French Case Explanatory Analysis," GREDEG Working Papers 2014-04, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    5. Malafronte, Irma & Porzio, Claudio & Starita, Maria Grazia, 2016. "The nature and determinants of disclosure practices in the insurance industry: Evidence from European insurers," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 367-382.
    6. Klumpes, Paul, 2014. "Investigating risk reporting practices in the global insurance industry ‐ Abstract of the London Discussion," British Actuarial Journal, Cambridge University Press, vol. 19(3), pages 728-746, September.
    7. Ali Alnodel, 2018. "The Impact of IFRS Adoption on the Value Relevance of Accounting Information: Evidence from the Insurance Sector," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(4), pages 138-138, March.
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