Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Abstract

Impact of the Application of IFRS 9 Standards on the Profits and Losses of Insurance Companies Listed on the Amman Stock Exchange

Author(s): Ola Mohammad Khersiat, Riham Fathi ALkabbji

This study aims to identify the effect of applying the standard IFRS9 “Financial Instruments” standard on the profits and losses of insurance companies. Insurance companies in Jordan have started applying this standard as of 1/1/2018. The two researchers explored the effect of this standard through receivables on the profits and losses. Tax assets, bank deposits, financial assets at amortized cost and loans holders of life insurance and of life insurance and checks on the collection “Account Receivable: Reinsurers`”. Results show that there is a statistically significant impact for the application of the standard IFRS 9 standard on profits and losses of insurance companies, and that the independent variables have been impacted to varying degrees. By using the factor analysis, variables have been classified from the most influential on the profit and losses of the insurance companies to the least influential, while the most affected and influential of these variables were bank deposits. It has been also found that the FAAC, TA ranked second, and LHLT, PR third in terms of influence. The study mainly recommends that IFRS 9 standard should be applied to address some of the difficulties experienced by insurance companies when processing financial instruments and derivatives, as well as to present financial lists that conform to users of accounting information.