Primary Contacts: Donald B. Applegarth, Joseph A. Bruce or Todd J. Lucas
U.S. companies may be required to convert their financial reporting from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS). As it currently stands, approximately 120 countries permit or require reporting in accordance with IFRS. This convergence of standards will affect public companies as well as non-public companies.
If and when IFRS becomes the global accounting standard, the only remaining questions for U.S. companies are “when?” and “how?” The SEC answered the “when” with its release of a proposed roadmap, which includes a timeline for adopting IFRS, beginning in 2014 for public companies. With no definitive timeline for IFRS implementation for privately-held companies, the International Accounting Standards Board (IASB) issues IFRS for small- and medium-sized entities (SMEs), a condensed version of full IFRS that should be easier to adapt and implement, in July 2009.
As for the “how,” that is a more difficult question to answer. IFRS will not only affect your company’s finance and accounting departments, but also will affect processes, internal controls and information technology systems. With many companies already mired in the daily grind of financial accounting and reporting under a set of often complex standards, learning, adapting, implementing, and understanding these international standards will be a challenge. There is a reasonable, cost-effective solution to convergence service providers with Schneider Downs.
Our experienced personnel can assist with project management and planning, needs and GAP analysis, information systems reviews, as well as training and understanding of IFRS and its impact on you.
Read recent IFRS updates.