Wither to IFRS?

The globalization of business and finance has led more than 12,000 companies in more than 100 countries to adopt IFRS. In 2005, the European Union (EU) began requiring companies incorporated in its member states whose securities are listed on an EU-regulated stock exchange to prepare their consolidated financial statements in accordance with IFRS1. Australia, New Zealand and Israel have essentially adopted IFRS as their national standards. Canada, which previously planned convergence with U.S. Generally Accepted Accounting Principles (GAAP), now plans to require IFRS for publicly accountable entities in 2011. The Accounting Standards Board of Japan (ASBJ) and the International Accounting Standards Board (IASB) plan convergence by 2011. On November 11, 2008, Mexico announced it would adopt IFRS for all listed entities starting in 2012. (www.ifrs.com)

The recent subprime crises has challenged standard setting bodes to raise the the bar and purse convergence efforts more vigorously than before. It is becoming a glaring relality that IFRS is no longer an option even in the US but a business case and opportunity that needs to be explored. Other accounting authorities have mentioned that given the complexity and rapid developments in IFRS, there is need for companies to invest in Global Centres of Excellence especially those with cross boarder listings in order to offer timely business IFRS solutions that have a significant impact on strategy and operations. For example, implementing the revised IFRS 3, Business Combinations and IFRS 1, First Time adoption of Accounting Standards has implications on reported earning and IT platforms with a lot of integration required and process reingineering.

The filing of statutory returns to tax authorities, regulators such as SEC and Central Banks is also needs to be considered. These are indeed excting times giving an opportunity for global IFRS experts to offer business solutions to business.

Going forward, change will be the only constant as there are definately going to be a lot of changes and refinements especially to far value standards such as IAS 39, IAS 32 and also those standards that deal with consolidations and SPVs e.g. SIC 12, Considation of Special Purpose Entites

Dony Mazingazo, ACCA has special interest in IFRS and financial management