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We mentioned the SEC’s IFRS Road Map and Milestones in a previous post.
The achievement of milestone 1 “Improvements in Accounting Standards” is key to IFRS and GAAP convergence. The goal of milestone 1 is to have the IASB (IFRS) and FASB (US GAAP) converge their standards to a point where there aren’t many, if any differences. At this point, these boards appear to be gradually converging their accounting standards. This approach is significant because it will allow companies to take on changing accounting standards at a more manageable pace, rather than having to deal with a significant cutover of accounting standards all at once. As a result, this approach may reduce the burden of conversion on companies. With that being said, many companies will still have to deal with the challenges of staying up to date with changing accounting standards, slowly converting systems and processes to record transactions properly, training employees, and the anticipated requirement to produce IFRS financial statements over a 3 year period during the initial filing (as described in milestone 6 of the SEC road map, page 21).
So challenges are still present, but maybe it won’t as daunting an undertaking as originally thought. Even with the end point remaining vague, two ways many companies are preparing for IFRS is by setting an IFRS company strategy and/or by performing a Readiness Assessment. We’ll continue to monitor IFRS happenings and keep posting our thoughts.
Has your company defined its IFRS strategy?
Has your company had an IFRS Readiness Assessment performed to proactively identify areas to strengthen your strategy?
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.