Belgium’s Unique Approach to Insurance Company Accounting

Public Market Exemption

In a departure from traditional accounting practices, Belgium has implemented a unique approach when it comes to insurance companies whose securities do not trade in a public market. According to sources close to the Belgian Accounting Standards Board, these companies are exempt from preparing IFRS consolidated statements if certain conditions are met.

• Conditions include filing consolidated financial statements of their foreign parent company in a Belgian local language (French or Dutch)
• This exemption is seen as a way to streamline reporting requirements for these companies and reduce administrative burdens

IFRS Adoption

In contrast, insurance companies whose securities trade in a public market are required to report under IFRS Standards as adopted by the EU. This applies to all foreign companies with publicly traded debt or equity securities in Belgium, unless their local accounting standards have been deemed equivalent to IFRS by the European Commission.

Translation and Adoption Process

The Belgian government has implemented a formal process for translating and adopting new or amended IFRS Accounting Standards. The process involves:

• The Directorate-General for Translation of the European Commission, which takes care of translations into official languages
• A translation contract with the IFRS Foundation to produce an “official translation” for publication

SMEs Exemption

Interestingly, Belgium has not adopted the IFRS for SMEs Accounting Standard for any small and medium-sized enterprises (SMEs). This means that these businesses are not required or permitted to use this framework. Instead, they continue to follow traditional accounting standards.

• The Belgian Accounting Standards Board notes that there is a good European framework in place for SMEs through the Fourth and Seventh European Directives
• With the revision of these directives, SMEs may be able to reduce their administrative burden even further

Conclusion

Belgium’s approach to insurance company accounting reflects its commitment to streamlining reporting requirements while maintaining transparency and accountability. As the global economy continues to evolve, it will be interesting to see how other countries adapt their accounting standards to meet new challenges and opportunities.