3 February 2006 -- The International Financial Reporting Standards (IFRS) conversion has prompted major changes for most companies in the retail and consumer sector since its introduction on January 1, 2005.
As part of their responsibilities, board members should be aware of potential IFRS consequences on information systems, internal control process, internal organisation, etc. All these changes, both directly and indirectly linked to the IFRS, have to be taken into consideration and closely managed. However, without precise knowledge of the implications of their decisions, board members will be unable to perform their strategy-defining role in an efficient manner.
To help inform board members’ strategic decisions in the new and evolving IFRS environment, PricewaterhouseCoopers has published a white paper 'IFRS in action: What do retail & consumer board members need to know?' It highlights the particular issues for the industry sector, summarising key implications and changes in the way companies are required to report their performance.
The PricewaterhouseCoopers white paper identifies 10 industry IFRS transition issues as a useful guide to help board members detect the significant risks for their company and gain a clear overview of the potential impacts of their decisions.
The 10 key issues are: revenue recognition; vendor rebates and allowances; customer incentives; reporting policies; property and leases; capitalised and deferred costs; brands and intangible assets; inventories; loss-making stores and closures; financial instruments and embedded derivatives.
Christian Perrier, PricewaterhouseCoopers Retail & Consumer partner, said:
“Retail and consumer companies’ board members must, at the very least, understand the possible impact of IFRS on brand value and effectiveness. They must be in a position to detect and pull the alarm on decisions that could impair the companies’ future and reputation.”
PricewaterhouseCoopers’ white paper 'IFRS in action: What do retail & consumer board members need to know?' provides an issue specific, sector-based reference tool for the particular use of board members involved in the retail and consumer sector.
Notes to editor:
1. To download a copy of the white paper from mid February 2006, go to IFRS. For a hard copy please contact: Megan Hofmann.
2. PricewaterhouseCoopers provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using Connected Thinking to develop fresh perspectives and practical advice.
3. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
