Many Canadian companies plan for bulk of IFRS conversion in 2010

What: Are Canadian companies making positive strides in their transition to International Financial Reporting Standards (IFRS)?

According to a study conducted by the Canadian Financial Executives Research Foundation (CFERF), the research institute of FEI Canada, and sponsored by PricewaterhouseCoopers (PwC), the bulk of IFRS conversions for half of the Canadian companies surveyed are planned for 2010. Indeed, this is when those companies had indicated they would spend the majority of their conversion budgets.

Yet, with the January 1, 2011 deadline for the transition to IFRS for Canadian companies looming on the horizon, many report challenges related to staff shortages, internal systems and identifying anticipated changes to their financial statements.

Key Survey Findings:

• Significant impact on financial statements
  • 57% of companies report that they expect IFRS adoption to have a significant impact on the reported value of their assets. The results are higher for utilities (84%) manufacturing, 78% and mining and oil and gas 67%
  • 25% of companies expect a significant change in the reported value of pensions
  • 20% expect a significant change in the reported value of their financial instruments
  • 20% expect a significant change in reported revenues
  • 20% expect a significant change in the value of goodwill
• Disclosure of IFRS impacts expected in 2009
  • 58% of public companies will be disclosing a qualitative assessment of the impacts of IFRS conversion in their 2009 MD&A.
  • 25% will be making disclosing both a qualitative and quantitative assessment of the impacts of IFRS.
• Are internal systems ready to run?
  • While 55% of public companies say they have not yet assessed system implications of the changeover, 72% maintain that they plan to run parallel manual IFRS and Canadian GAAP financial reporting systems throughout 2010.
• Stakeholder awareness and training
  • 40% of companies surveyed report they have not yet communicated anticipated impact of IFRS on asset values with shareholders, rating agencies or analysts.
  • 82% of public companies report having begun training finance staff about IFRS. Only 41% of public companies indicated that they had started educating their Board of Directors.
  • As conversion to IFRS is not just a corporate transition, all employees, Boards shareholders and key stakeholders must understand the implementation process and its resulting impacts.

Complete survey results can be accessed at http://www.feicanada.org/files/IFRS_Readiness_Final_Web.pdf and www.pwcifrs.ca.

About The Canadian Financial Executives Research Foundation (CFERF)
CFERF is the research institute of Financial Executives International Canada (FEI Canada), the all-industry professional membership association for senior financial executives that provides professional development, thought leadership and advocacy services to its over 2000 members. CFERF's primary objective is to study emerging financial management issues in Canada with the aim of increasing the competitive capabilities of Canadian companies across the country. Further information can be found at www.feicanada.org.