IFRS Implementation – Impact
IFRS Implementation will have wide ranging impact for an organization. Impact will be felt on business, technology and stake holders. Considerable preparation will be required internally in terms of gap analysis, guidelines, controls, training etc. Depending on the size, maturity and complexity of IT ecology, changes to transaction and analytical system could be significant. Finally, IFRS will have an impact (negatively or positively) on the way financial performance is reported.
Here is a summary of implications reported in Europe:
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For an organization moving to IFRS convergence, impact can be summed up in the following areas:
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Technical Accounting |
Process and Statutory Reporting |
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• Overall approach to IFRS Implementation • First time adoption policy consideration • Ongoing policy considerations, including alternative approach to “principles” |
• Internal controls and processes, including documentation and testing • Management and internal reporting packages • Global reporting packages • Statutory reporting, including “Opportunities: around IFRS adoption |
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Technology Infrastructure |
Organizational and business issues |
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• General ledger and chart of account structure, including performance metrics • Global Consolidation • Sub-system issues related to configuration and data capture • Capability to manage multiple GAAP accounting during transition |
• Treasury Management • Debt covenants and financing • Mergers and acquisitions • Management compensation • Product development • Management Information • Human Resources and training |
In the coming posts, lets look at (1) Challenges to adoption from an IT perspective (2) Impact on Financial Consolidation process and (3) Options available to companies
|
Technical Accounting |
Process and Statutory Reporting |
|
• Overall approach to IFRS Implementation • First time adoption policy consideration • Ongoing policy considerations, including alternative approach to “principles” |
• Internal controls and processes, including documentation and testing • Management and internal reporting packages • Global reporting packages • Statutory reporting, including “Opportunities: around IFRS adoption |
|
Technology Infrastructure |
Organizational and business issues |
|
• General ledger and chart of account structure, including performance metrics • Global Consolidation • Sub-system issues related to configuration and data capture • Capability to manage multiple GAAP accounting during transition |
• Treasury Management • Debt covenants and financing • Mergers and acquisitions • Management compensation • Product development • Management Information • Human Resources and training |
