IFRS: Tools and Methodology

Web-based Platform

PwC has developed a web-based communication and documentation tool designed to facilitate data flow and documentation of a GAAP conversion project. It aids the development of technical advice by facilitating communication and collaboration between PwC and the client. Our web-based Platform is designed to enable geographically dispersed teams to communicate, collaborate and share knowledge and allows real-time progress reporting of the assessments and issue resolution.

Benefits

• Flexible and transparent channel for communication
• Allows active management of ongoing assessments (component evaluations), project schedules, cross-functional dependencies, issues, and team status reporting
• Facilitate communication across geographically-dispersed teams and across organizational functions
• Real-time reporting provides insight into team and individual progress, increasing accountability for results
• Means for document control designed to reduce replication or version control issues
• May be configured: sensitive or confidential information can be viewed only by those who are approved
• Final documentation of the assessments, technical papers and issue resolution are provided for client documentation and retention needs

Platform capabilities

• Survey development:
  We have developed GAAP Diagnostic Questionnaires, designed to assess an organization's policies and procedures and to assist with the early identification of issues that could arise as a result of differences between existing GAAP and new GAAP.
• Component Evaluation development
  Financial statement account level assessments are performed using the Component Evaluation tool. The platform aids in assigning resources, due dates and priorities for the completion of the assessment and links issued identified in the assessment and conversion process. Component evaluations form the primary final output from the platform.
• Issue management
  Provides a reporting mechanism of issues identified, assign responsible resources, dues dates, priorities, and link to detailed technical issue papers as required.
• Project document management
  Maintains all electronic files related to a project, regardless of document type (MS Word, Excel, pdf, etc.) in a central repository during the project designed for easy and timely access. Provides document version control through a check in/ check out capabilities. Maintains standard templates for use across teams to ensure consistency.
• Dashboard reporting
  Multiple dashboards are available for ease in viewing document status and issue resolution progress by executive sponsors and project members. All information stored in the platform can be displayed graphically in the aggregate or by individual teams.
• Documentation library
  The Documentation library contains links to PwC’s leading knowledge tools including recent publications, webcasts, and video learning center.

PwC’s deep technical knowledge and conversion experience, along with our methodology and tools can be leveraged by clients to support their conversion process.

Use of the web-based  platform is provided as part of PwC services and is not provided on a standalone basis.

Component evaluations

The Component Evaluation ("CE") tool provides a framework for analyzing technical accounting guidance in certain complex accounting areas to facilitate management's identification of differences between existing GAAP and new GAAP.

Component evaluations are available in the following key areas:

Revenue recognition	Decommissioning costs	Leases
Income taxes	Intangible assets	PP&E
First-time adoption	Impairment	Consolidation
Inventories	Provisions	Foreign currency
Derivatives and hedging	Employee benefits	Business combinations
Research & development	Stock-based compensation	Presentation of cash flows
Earnings per share disclosures	Loans and receivables	Assets held for sale & Dis. Ops
Financial assets and liabilities

Each CE is designed to facilitate knowledge transfer. Portions of each complete CE document can also serve as the basis for management's creation of an IFRS accounting manual.

Benefits of using the Component Evaluation tool include:

• Provides a disciplined approach to identifying and analyzing GAAP differences and full consideration and impact of the conversion, accounting policy and disclosure selection, data gap analysis, system considerations and recommended solutions, tax impacts and recommended solutions, and impacts and recommendations for other functional areas within the company.
• Establishes a framework for the identification, recognition, measurement and presentation and disclosure requirements.
• Facilitates the discussion around the changes needed to operationalize the new accounting policies to be adopted.
• Documents, in a single location, management's final assessment, decisions and executive approval, either in summary or detailed form, in the conversion.
• Facilitates in-depth training and knowledge transfer to company financial resources.

CEs are useful in both the initial assessment and the in-depth analysis needed for executing a GAAP conversion plan. CEs are designed to work in our web-based platform but can also be used independently by our clients who have less complex reporting structures.

Additional tools to assist in the initial project assessment include:

Legal entity survey

IFRS is already impacting US companies as IFRS adoption continues globally. The importance of timely assessment of foreign subsidiary statutory reporting requirements and adequate corporate involvement cannot be underestimated. Multinational companies will need to closely manage IFRS adoption by non-US subsidiaries as decisions made by non-US subsidiaries in advance of the US parent company adoption will impact efficiencies or compatibility at the US parent level. Such decisions include election of first-time adoption exemptions and accounting policy elections.

Further, US financial reporting will undergo an unprecedented level of change within the next several years. The FASB and IASB are currently working on roughly a dozen joint projects with the goal of converging and improving both US and international standards. Convergence between US GAAP and IFRS presents a number of business challenges and opportunities.

PwC's IFRS international legal entity survey addresses our clients' need to look at their global footprint. It is a web-based survey tool that helps clients survey their subsidiaries around the world and identify entities that are already using IFRS or local variants of IFRS, or that will face IFRS convergence or adoption before the potential integration of IFRS into the US reporting system.

The areas assessed include:

• Understanding the potential scope of change as a result of IFRS based on the types and location of legal entities
• Determining the level of, and opportunities for standardization based on legal entities already using IFRS or are permitted to use IFRS
• Understanding how IFRS was implemented at legal entities, where applicable (e.g. policy options and conversion methods)
• The nature and extent of assistance that may be required by legal entities

The survey includes questions, as selected by management, covering technical issues and accounting policies as well as processes, systems, people, controls, and implementation challenges.

Clients that have used this tool have appreciated the comprehensive results gained in a short period of time. It can be used as an effective first step in an IFRS assessment, to gain that high-level understanding of where IFRS reporting and conversion in the organization as a whole stands. Once that understanding is in place, next steps and a further impact assessment can become more clearly defined.

IFRS training

We have developed a collection of 28 modules, designed for live in-person training, introducing clients to specific IFRS technical components. Each presentation provides an overview of key IFRS technical topics which highlight the key differences between IFRS and US GAAP and cover practical business considerations when transitioning to IFRS.

By the end of the training, participants should be able to define the fundamentals of the presented technical component and distinguish the key similarities and differences between IFRS and US GAAP. Additionally, they will be able to identify the people, process and technology impacts of the presented technical component.

For additional information or to schedule IFRS training, please reach out to your PwC engagement team or contact us.