"You have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilisation."

Berkshire Hathaway's Charlie Munger probably did not have actuaries in mind when he wrote those words. However, with the upcoming changes to International Financial Reporting Standards (IFRS) 9 and 17 at the forefront of the global actuarial agenda, interest in accounting topics is booming.
During the past few years, IFRS-related discussions have often been restricted to the broad changes stemming from accounting standards. However, as we approach the 2022 implementation date, the debate is becoming more specialised.
The (consciously) loose guidance from the accounting standard-setter provides an unparalleled opportunity for actuaries to design models and methods that will help put the new accounting standards into practice. This is also fertile ground for many to start or develop a career in.
The Actuary has echoed the IFRS debate and will continue to progress along with it: we provide an educational platform, as well as a pulpit for professionals to broadcast their thoughts. In the June issue, Eve Pastor walked us through the interaction between IFRS 9 and 17, and their impact on asset liability management. This month we focus again on the specifics; Martin Sarjeant overviews how to prepare for implementation , while Daryl Boxall reviews the controversial discount rate methodologies.
Beyond accounting, this issue also sees us covering hot topics in risk. In the pensions field, Simon Willes flags the importance of considering employer covenants when de-risking defined benefit pension scheme investments. On climate risk, Mark Cornelius from the UK Prudential Regulation Authority and Mark Rothwell provide, respectively, the regulator's concerns and an actuarial perspective.
Enjoy the read!