EghtesadOnline: For International Financial Reporting Standards to truly take hold in Iran, they must be accorded significance on the national scale, the governor of the Central Bank of Iran said.
"A successful implementation of IFRS requires everyone to treat it as a national scheme that must go beyond a concept ratified by the Securities and Exchange Organization of Iran and even CBI, because it would benefit a wide variety of people," Valiollah Seif was also quoted as saying by the official website of the central bank.
Seif made the statements as the keynote speaker at the Conference on IFRS and Their Role in Improving Transparency of Financial Markets held in Tehran on Saturday.
Minister of Economic Affairs and Finance Ali Tayyebnia, President of the Central Insurance of Iran Abdolnasser Hemmati and Director of the Audit Organization of Iran Akbar Soheilipour were among top officials in attendance, Financial Tribune reported.
International Financial Reporting Standards is a single set of accounting standards, developed and maintained by the International Accounting Standards Board with the intention of those standards being capable of being applied on a globally consistent basis by developed, emerging and developing economies.
IFRS provides investors and other users of financial statements with the ability of comparing the financial performance of publicly listed companies on a like-for-like basis with their international peers.
On the prerequisites deemed important by the central bank, the official outlined nine principles, with the first being the implementation of bank infrastructures. These infrastructures include a software update that could help access the information required by the new financial statements.
Seif said how IFRS9 is used, "which will replace IAS39 in 2018", is the second principle.
IFRS9 standard includes requirements for recognition and measurement, impairment, de-recognition and general hedge accounting.
He noted that "a reasonable amount of trust enjoyed by CBI as the supervising entity" is the third principle and the fourth calls for strengthening independent bank auditors "for the purpose of mastering the application of IFRS in banking".
The top CBI official focused attention on the structure of financial reporting and outfitting the evaluation regime, and using "suitable and credible models of evaluation" as the next two principles.
In describing the next principle, he stressed that unreliable evaluation reports must not be published, while referring to amending a number of tax rules and regulations as the eighth one.
In outlining the final principle, he referred to a number of statistics "influenced by the banking laws of Iran, which are fundamentally not within the framework of auditing standards", be it national standards or IFRS ones.
The IFRS-based balance sheet templates were first released by CBI in February to improve financial transparency and the international operations of Iranian banks. Lenders are now required to report their statements as per IFRS guidelines.
The head of CII said considering the legal obligation of insurance companies to draft their financial statements in accordance with the sample approved by the Supreme Council of Insurance, "the prerequisites required to draft financial statements in line with international standards have been completed."
Hemmati stressed that the process of separating accounts pertaining to life and non-life insurances is being completed.
The head of Audit Organization of Iran said if the information is released in an ambiguous atmosphere, "we cannot expect complete transparency from IFRS".
Soheilipour stressed that the foundations of information must be made transparent and publishing data "will give us transparency".
He announced that Majlis Research Center has obtained six IFRS books, the translation of which has already begun.
"With the implementation of Iran's nuclear accord in January and the relative easing of sanctions, an agreement was signed with [international entities] and the audit organization managed to obtain the necessary permits related to the issue," he said.