more-arw search

A Few Things to do While Awaiting IFRS Decision

Businesses can take steps to prepare while awaiting a ruling on IFRS.

It may seem as if a final decision has been made on whether the U.S. will migrate to the more broadly used International Financial Reporting Standards, but companies that have to make the switch will experience many changes, and it may be best to start preparing now.

While the Securities and Exchange Commission is still debating how it will converge the U.S. Generally Accepted Accounting Principles with IFRS, businesses that have never used the multinational standard will need adequate time to train their accountants and make systemic adjustments to comply.

According to PricewaterhouseCoopers, no matter what the SEC decides, "the effects of global reporting on U.S. companies will accelerate over the next few years." With that in mind, there are several things companies can do to get the ball rolling on transitioning to IFRS.

First, start thinking about how the new standards will impact the company and identify all processes and departments that stand to be affected by the switch.

An assessment should be "high-level and strategic," PWC says, and should include reviews of business, tax, financing, accounting, long-term contracts and other departments, to name a few.

The switch will be challenging, and thorough planning will lessen the shock. Maintain oversight of all subsidiaries to ensure they are also preparing.

Finally, don't wait for an SEC directive to get moving. If there are any conversion steps you can take now, do so.  

Products and Companies: