International Financial Reporting Standards (IFRS) represent the most significant shift in financial reporting and the biggest accounting change in a generation.
2005 was the year that many countries around the world adopted IFRS, or standards that are so close that few significant differences remained. All 25 EU countries were required by the 2002 Regulation to adopt IFRS for listed groups and countries in the Asia Pacific such as Australia and Hong Kong have also adopted IFRS in 2005. For the purpose of US filings, the SEC has stated that it will only accept financial statements that are prepared using IFRS or EU-endorsed IFRS.
Specifically in Greece, listed companies must also prepare their stand-alone financial statements under IFRS and, under certain conditions, so should subsidiaries of listed Greek companies.
Implementing IFRS is far from over. The next few years is likely to be a period of significant change in financial reporting.
The standards applicable for 2005 are subject to significant changes and IASB’s timetable is quite overloaded for the forthcoming years. The IASB has issued new standards and has amended existing standards that come into effect from periods commencing on or after 1 January 2006, that relate to Employee benefits, Exploration for and evaluation of Mineral Resources and Financial Instruments. Furthermore, the IASB expects to issue exposure drafts in 2006 in several subjects such as income taxes, segmental disclosures and borrowing costs.
Additionally, the Board is working on special standards for small and medium-sized entities (SMEs) that will have the same framework as full IFRS but requirements will be tailored to meet the different needs. An exposure draft of these standards is expected in 2006 and the final standards are expected during or after 2007.
Getting through the IFRS conversion process and initial reporting period is a great challenge.
Companies converting to new accounting standards tend to underestimate what’s involved, particularly in terms of time and resources.
Conversion to IFRS is much more than a technical accounting issue. IFRS may significantly affect any number of a company's day-to-day operations or even impact the reported profitability of the business itself. Companies that have benefited most from the transition are those that looked at this as a chance to make improvements to their systems and processes and have used it as a focus for more efficient, timely and meaningful internal and external financial information.
Whether you have already adopted IFRS, required to adopt IFRS now, or considering if it makes sense to adopt PricewaterhouseCoopers can help.
Even if you have a well established IFRS project and you have already released IFRS financial statements, there still may be areas where you could benefit from additional support i.e. we can provide assistance to make IFRS reporting more sustainable, technical support regarding specific issues, help you respond to ongoing changes in existing standards, implement new standards etc.
If you are making the change to IFRS, our extensive experience can help you bring your IFRS project to a successful conclusion and ensure that there are no surprises.
If you are simply examining whether or not to move ahead with IFRS, even though you are not required to do so, we can help you decide on the right course of action. The decision depends on each company’s particular circumstances, but growing numbers of companies are deciding that the benefits of changing to IFRS outweigh the costs.
PwC has a proven track record in helping companies of all sizes and in all sectors to successfully complete the transition to new accounting standards. In the last couple of years, our Greek IFRS Transition team has helped more than 20 companies to successfully complete the transition to IFRS and have provided technical support to plenty of other entities. We can provide extensive IFRS Services that can fully support you.
Our team deliver practical solutions helping companies to address key challenges ensuring that there are no surprises.
PricewaterhouseCoopers has developed a range of publications and online solutions to provide you with the very latest information and guidance. They are used to helping organisations worldwide, including both companies that already prepare IFRS and first adopters.
