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International Financial Reporting Standards
Planning for IFRS Implementation
Canadian enterprises need to be moving forward on their plans for conversion. They face somewhat different circumstances than did their counterparts in many other countries:
- earlier communication may be required in the marketplace — in their 2008 annual filings, Canadian companies may be required to disclose their plans for making the transition to IFRS as well as the expected impact of adopting IFRS
- phased transition — because some standards will be adopted before 2011, Canadian companies will have multiple implementations.
In addition, SEC registrants may have additional timing options, depending on CSA decisions.
Key questions to ask:
- What are the major differences between IFRS and Canadian GAAP for our organization? What will be the likely impact on our financial statements, including disclosures?
- How will our financial reporting systems be able to capture the data required by IFRS?
- What is the estimated directional impact on profit and equity if our financial statements were presented under IFRS? What other impacts might the transition to IFRS have? …earnings per share? …dividend policy?
…financing arrangements / covenants? …performance management?
…employee compensation and incentive plans? …tax implications?
…statutory and regulatory reporting? …communications to analysts and stakeholders?
- Do we have adequate resources to manage the transition efficiently?
- What is the impact on new and existing internal controls over financial reporting for certification purposes?
- What are the training needs of our finance and other personnel? …for analysts and stakeholders?
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