When new IFRS Standards take effect in Kenya
How new and amended IFRS Standards become effective in Kenya without a local endorsement step, and a simple firm process for tracking them.
By Achekam · · 4 min read · For Accountants & audit firms in Kenya
In some countries, a new IFRS Standard is not law until a local body has reviewed it, perhaps amended it, and formally endorsed it. Accountants there wait for a gazette notice or an endorsement list before they change anything. Kenyan accountants sometimes assume the same must be true at home, and look for a local announcement that never comes.
Kenya works differently. Once the IASB issues a standard or an amendment, there is no further local step before it applies. That makes the firm's job simpler in one way and harder in another: no endorsement to wait for, but also no local signal that something has changed. This article explains the position and suggests a process for staying on top of it.
How Kenya adopted IFRS
The IFRS Foundation's jurisdiction profile for Kenya traces the history. In Technical Release No. 4, the Council of ICPAK adopted IAS Standards, now known as IFRS Standards, as the financial reporting standards in Kenya, effective for financial statements covering periods beginning 1 January 1999. The profile also records that Kenya has adopted the IFRS for SMEs Standard alongside full IFRS.
IFAC's member profile of ICPAK, under its membership obligation on accounting standards (SMO 7), describes the same position in today's terminology: ICPAK has adopted IFRS Accounting Standards and the IFRS for SMEs Accounting Standard for application in Kenya.
One caution about sources. The IFRS Foundation's profile was last updated on 16 June 2016. It remains the Foundation's record of Kenya's approach, but anything that may have changed since should be checked with ICPAK.
No local endorsement step
The point most relevant to effective dates is this. The IFRS Foundation's profile says new and amended IFRS Standards take effect in Kenya as issued by the IASB, with no endorsement process. Its fuller wording is that they are immediately effective as and when the IASB issues them.
In practice, firms work from the effective date and transition provisions the IASB writes into each standard or amendment. There is no separate Kenyan date to look up and no local transition period on top. A Kenyan reporter applying full IFRS follows the IASB's timetable.
No Kenyan modifications
The profile adds that, while the ICPAK Council keeps the right to make changes, it has not modified IFRS Standards. So there is no "Kenyan IFRS" with carve-outs or additions. What the IASB publishes is what Kenyan entities apply.
That also has a consequence for wording. A Kenyan entity's statements describe conformity with IFRS Standards as issued, not with a local variant; the related wording questions are covered in stating IFRS compliance in Kenyan statements.
IFRS for SMEs beside full IFRS
Because both full IFRS and the IFRS for SMEs Standard are adopted, firms need two tracking lists, not one. Changes to full IFRS do not automatically change the SME standard, and the SME standard is revised on its own cycle. A firm with clients on both frameworks has to watch both. Which clients may use the SME standard is discussed in choosing a financial reporting framework for Kenyan SMEs.
The IFRS Foundation's profile of Kenya sets out the split, full IFRS for publicly accountable entities with the IFRS for SMEs Standard permitted for others, and ICPAK's role in adopting the standards.
What Achekam does, and the feed it does not have
Achekam keeps a Standards & Regulatory Updates page, but it is worth being clear about what that page is. Achekam does not pull a live feed of standards and regulatory changes from standard-setters or regulators. The page shows what Achekam's knowledge base records. A firm should not treat an empty or unchanged page as evidence that nothing new has been issued.
Where new requirements reach the statements themselves, the Studio's policy library is the place to look. It includes standard accounting policy wording based on IFRS for SMEs, labelled for review before issue, and staff can write their own policies. Notes take their figures from the mapped trial balance; anything the trial balance does not hold is left as "[to be completed]", and a line carries a note reference only when that note is in the set.
In effective-date terms, that means two things. For a client on full IFRS, the firm writes and maintains its own policy wording, because the library's base wording is drawn from the SME standard. And whenever a new requirement takes effect, someone has to check whether the policy text and notes in use still describe it, because the review label on standard wording is a prompt, not an update.
A firm process for tracking new standards
- Name an owner. One partner or manager is responsible for following IASB publications for full IFRS and the SME standard.
- Keep a register. For each new or amended requirement, record the title, the IASB's effective date, whether early application is allowed, and which clients it is likely to affect.
- Review at planning. At each engagement's planning meeting, check the register for requirements effective in the period, and for those issued but not yet effective, which may need disclosure.
- Update the firm's wording. Revise the firm's own policy text in the Studio and have a reviewer approve it before the next issue.
- Brief the team. A short note to staff when something significant takes effect saves each engagement team from discovering it separately.
- Check ICPAK. Look at ICPAK's publications periodically for any Kenyan announcement or guidance, since the 2016 profile may not reflect every later development.
Sustainability reporting is moving on its own track and is worth adding to the same register; see sustainability reporting roadmaps in Nigeria and Kenya.
The first step
Start the register with what is effective for the year-ends the firm is working on now. Once the current year is captured, adding new items as the IASB publishes them is a small monthly task.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
