IFRS presents opportunities for efficient IT systems, businesses

TORONTO, September 29, 2008 — The globalization of business has led to the need for a set of common, high-quality accounting standards. In comes IFRS — International Financial Reporting Standards, which is a fundamental change initiative affecting not only the numbers, but systems, processes and data supporting financial reporting.

A new whitepaper released today from PricewaterhouseCoopers (PwC), Are you ready for IFRS?, shows that IFRS presents an opportunity for companies to look ahead to the requirements of the business, and design a conversion plan that takes advantage of project synergies, embeds change throughout the organization and creates a more efficient business structure going forward.

Canadian companies that intend to just meet the deadlines should be aware they will need to use IFRS standards to prepare interim and annual financial statements for financial years beginning on or after January 1, 2011. These statements must include comparative information prepared in accordance with IFRS for at least one year (i.e. for 2010). While this sounds like plenty of lead time, publicly traded companies will be required to disclose their transition plans in 2008 and the anticipated financial statement effects of their changeover in 2009.

"Although it may be easy to dismiss this looming transition as an issue solely for the accountants, the implications and ramifications of IFRS will hit home for everyone within a company, including the IT function," says Margaret Neary, a vice president with PwC Canada's IT Advisory practice. "To put this in context, since IT systems support and enable the financial process, this could represent changes to not only the financial systems themselves, but also supporting interfaces and data."

The scope of the change will vary from organization to organization, and will depend on a number of factors including, but not limited to:

• Industry sector
• Application architecture
• Data/information architecture
• Enterprise Resource Planning (ERP) system: design, version, modules deployed
• Enterprise Performance Management (EPM) systems: design, version, modules deployed, for example

According to the PwC whitepaper, there are five key questions organizations and their CIOs need to ask:

1. Will we need to consider whether to add new data sources and/or change existing financial data, metadata and interfaces to ensure the organization has the underlying financial data required to support IFRS?
2. Where will we make changes within the application architecture to support IFRS reporting?
3. What impact will IFRS changes have on our IT projects already planned or "in flight"?
4. What impact will IFRS have on our ongoing operational processes such as current financial certification requirements like SOX 404 or Multilateral Instrument (MI) 52-109?
5. What are the organization's objectives for the project and appetite for change?

Neary notes that, "Understanding the approach your organization is planning to take will help you assess the scope of the project and your level of effort to successfully complete the conversion."

For more information please visit www.pwcifrs.ca

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