For upstream exploration and production (E&P) companies, the conversion to International Financial Reporting Standards (IFRS) will bring new complexities. While principles-based accounting under the new standards increases options for accounting policy, it lacks detailed guidance that E&P companies benefited from under Canadian GAAP. This may explain why a majority of respondents (63%) from a new survey on the state of IFRS readiness in the energy sector do not see the new reporting standards as an improvement over Canadian GAAP.
The economic downturn has delayed conversion efforts as organizations move resources to other priorities. Still, many energy companies are taking a pragmatic and measured approach to IFRS adoption. But timelines are tightening — and for many it will be a race to the finish line.
This quarterly update, therefore, focuses on the state of readiness in the adoption of IFRS within the energy industry as viewed by financial professionals. It also examines issues facing companies as they approach conversion deadlines and provides key insights from PricewaterhouseCoopers LLP (PwC), which has worked with clients around the world on IFRS projects.