IFRS Implementation – Options on integration
One of the key aspects to IFRS adaption is determining the key changes to Information systems and identifying the appropriate level for consolidation system changes.
Changes to information systems may be made at different levels in an organization’s financial reporting process—for example, at the group level or at the company level. To determine the appropriate level, management must consider various factors affecting the reporting and roll up of financial information.
Option-1: Group Level
Individual entities prepare financial reporting based on local GAAP. This financial reporting is converted to IFRS during the group consolidation process.
IFRS - Integration - Group Level
Organization Suitability
- Individual entities in certain countries do not have to report separately.
- Only a few simple adjustments are required and are made at the top level during the consolidation.
- Information to make conversion adjustments is readily available.
Option-1: Unit Level
Individual entities prepare financial reporting based on local GAAP and then convert that information to IFRS before sending the reporting to the group level for consolidation.
IFRS - Integration - Unit Level
Organization Suitability
- Individual entities in each country are required to report separately.
- Group structures are complex.
- Consolidated entities are numerous.
- All required source data is readily available.
