A Sea Change in Standards 

FROM: SEP-OCT 2008 ISSUE | BY PEGGY HOMAN, EDITOR

A new world order in International Financial Reporting Standards is nigh. As accountants gear up for the transition, a big question remains: how difficult will it be to implement IFRS? Our two feature articles examine this question and provide some suggestions as to what you can do now to prepare. Writer Gundi Jeffrey is currently editing an IFRS implementation guide and recommends Ernst & Young’s five top tips to help companies start their conversion:

• Give yourself the time you need
  The more time external stakeholders have to digest changes, the easier the transition will be.
• Anticipate questions
  Public companies will have to disclose a reconciliation between previously reported financial statements and restated IFRS results. Gaining an early understanding of these specific differences will help you anticipate questions.
• Look at performance indicators
  The increased use of fair values and restrictions on existing practices (such as hedge accounting) might change the profit number reported under IFRS. You may need to revisit your performance indicators for assessing business and executive performance.
• Document throughout
  IFRS is principles based. That means managers should be ready to explain the choices and judgments they have made.
• Disclose considerations early on
  More than 100 countries around the world have already adopted IFRS. One lesson learned from the experiences of other countries: disclose considerations early on, not at the end of the process.

CGA-Canada’s online offerings on IFRS include articles, courses, and webcasts. Upcoming webcasts will examine the role of IFRS 1; the presentation of financial statements under IFRS; and how IFRS will change key performance indicators. Check www.cga-pdnet.org and www.readyforifrs.com for more information.

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