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IFRS: who's really doing what?

A board member just asked me about what I'm (our acct'g team) is doing with IFRS right now. I told him I'm just waiting and watching. From my perspective this thing is rolling out so slowly that anything can still happen. But before I completely stonewall him I wanted to see what other CFOs are doing and saying about this. Are you updating your processes and procedures? Are you looking at technology? And what are you telling your board and CEO?

Answers

Bob Farkas
Title: Consulting CFO
Company: Crestview Associates, LLC
LinkedIn Profile
(Consulting CFO, Crestview Associates, LLC) |

If and when it is adopted, there will be an extended conversion period. Save you accounting consulting budget for things you need to do now. Boards always like frugal CFO's.

Ken Cada
Title: VP - Dynamics Practice
Company: Unified Business Solutions
(VP - Dynamics Practice, Unified Business Solutions) |

Mid-market ERP products like MS Dynamics GP in their new release GP 2010 address IFRS reporting needs. Unless your firm has a significant international presence, there is little benefit to changing to IFRS now, only costs. I believe your board member was just ensuring that you were on top of the issue. You need to develop a plan to address this change and present it to the board.

Peter Welch
Title: Global Accounting/Finance Consultant/Tra..
Company: ContractualCFO
(Global Accounting/Finance Consultant/Trainer & Founder, ContractualCFO) |

Totally agree with both Ken & Bob, though the probability of adoption is far more than 'if and 'when'. A frugal CFO is one thing but a CFO that missed the opportunity to slowly and carefully plan for IFRS and without pressure is another. IFRS implementations are far more than just accounting issues and it would behoove a smart CFO (without cost today) to start the 'understanding' process. We’re all ‘too busy’ (so the argument goes) but simply select someone key in accounting and setup a ‘side’ project to begin considering the impact of IFRS. Hiring a Consulting today for a very long-term engagement (just a few hours or less a month) to start guiding the process remotely will certainly not impact budget lines and/or hit the board’s radar screen. Ken’s comment, ‘your board member was just ensuring that you were on top of the issue’ is absolutely correct but in 2011 and forward if the IFRS issue comes clearly to the forefront and the question comes up again, you’d be in a excellent position to respond having quietly taken an initiative a year or so previously. Such an initiative I am suggesting will ‘save’ the company money as under old-budgets and under the radar you’ll be ahead of the game. Hope these comments are helpful.

Yusuf Azizullah
Title: Bus & IT strategist Professor
Company: University of Maryland
(Bus & IT strategist Professor, University of Maryland) |

Fyi,

Canada adopted officially IFRS Jan 1st 2011, India is coming on board April 2011.
If you have operations or business ties to Canada or India. Time to plan and start getting on board.

Topic Expert
Sunil Thukral
Title: Controller/Technical Accounting Advisory..
Company: Consultant
(Controller/Technical Accounting Advisory/ SEC Reporting, Consultant) |

Hi Yusuf.....agree that Canada is adopting IFRS as issued by International Accounting Standards Board (IASB), i.e. without any amendments. However, India is adopting IFRS with certain carve-outs. The bottom line is that more than 100+ countries are adopting IFRS, but all are not adopting the IFRS that is issued by the IASB.

In addition, there are a lot of US GAAP/ IASB convergence projects on the go. Hence, what IFRS that you see today is expected to dramatically change over the next few years (e.g. - financial instruments, leasing, revenue recognition, etc.)

Please feel free to join the LinkedIN group that I have started - "Understanding IFRS Financial Statements" at the following link : http://www.linkedin.com/groups?mostPopular=&gid=3770025

Please feel free to contact me at sunilattheIFRS [dot] com if you need any further clarifications on this issue.

Scott Gunn
Title: CFO
Company: In-Transition
(CFO, In-Transition) |

Any advice for someone who works on SEC footnotes and needs to get "up to speed" on potential changes that will come from going from GAAP to IFRS accounting?

Yusuf Azizullah
Title: Bus & IT strategist Professor
Company: University of Maryland
(Bus & IT strategist Professor, University of Maryland) |

Scott,

One of the best papers is by PwC paper is http://www.pwc.com/us/en/issues/ifrs-reporting/publications/ifrs-and-us-gaap-similarities-and-differences-september-2010.jhtml

Regarding Footnotes, each organization will have unique foot notes and Management discussion with it depending if they are implementing IFRS completely or partial.

Let me know, if I can help

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

Watching probably works for IFRS so waiting is OK, but "convergence" is the real mid-term focus and will be affected by the IASB perspective, a reason to watch fairly carefully. PwC's CFO network is a valuable resource as is Deloitte's IASPlus for IFRS.

Topic Expert
Sunil Thukral
Title: Controller/Technical Accounting Advisory..
Company: Consultant
(Controller/Technical Accounting Advisory/ SEC Reporting, Consultant) |

The SEC staff on last Wednesday (Nov 16) released reports analyzing the current reporting practices of companies using IFRS and comparing U.S. GAAP and IFRS requirements in specific areas.

This report is titled - "Work Plan for the Consideration of Incorporating
International Financial Reporting Standards into the Financial Reporting System
for U.S. Issuers - An Analysis of IFRS in Practice". It is a 65-page joint effort by the SEC’s Division of Corporation Finance and Office of the Chief Accountant that shows the results of an analysis of the most recent annual consolidated financial statements of 183 companies, including both SEC registrants and nonregistrants, that prepare financial statements in accordance with IFRS.

It is an interesting read as it also discusses the U.S. GAAP and IFRS differences. You can download the full report at the following link.
http://sec.gov/spotlight/globalaccountingstandards/ifrs-work-plan-paper-111611-practice.pdf

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