January 2011 – Deadline is Approaching – Don’t underestimate how long all of this will take.
The Accounting Standards Board of Canada has announced International Financial Reporting Standards (IFRS) will replace current Canadian GAAP as of January 2011 for all publically traded companies in Canada. Currently IFRS is adopted by over 100 countries worldwide including all EU countries and Australia. These countries represent over 45% of the world’s capital markets.
Your first steps should be to carefully assess your situation, do some advanced planning, and assemble cross-functional teams from accounting, IT, and your auditing partner. You will need to understand the impact that IFRS reporting will likely have on your organization, your financial reporting procedures, and your staff. With the right planning and the right people, we will be able to choose a path that fits your needs — and the process will be straightforward.
Financial Reporting Assessment
Your first steps should be to carefully assess your situation and the impacts . EPS can assist you with advanced planning, and assemble cross-functional teams from accounting, IT, and your auditing partner.
Not only your corporate accounting and financial reporting procedures will be directly impacted as at January 2011, but also your entire organization, including your systems and processes, your business and your staff.
A flurry of operational changes could be triggered by IFRS. You may have to re-examine contracts and debt agreements, treasury policies, employee benefits, education and training, and communications. You may also have opportunities to centralize statutory accounting functions into shared service centers. You may even need to revisit decisions about offshoring, outsourcing, and tax planning.
Assess which IFRS requirements will apply to your Company: IFRS VS Canadian GAAP
- 43 standards have minor differences
- 38 remaining standards have moderate to major differences
Examples: impairments and securitizations
- 3 IFRS have no Canadian counterparts such as for biological assets
- 9 Canadian standards have no IFRS counterpart
Example: Regulatory assets of rate regulated Utility companies
Componentization of assets
- 8 current Canadian standards may be disposed
- Software Compatibility
Is your financial software compatible with IFRS standards?
What’s happening in North America, one of the largest business-to-business markets in the world, is that as the standards change to IFRS, many software vendors will have to extensively modify their products, or risk having something no one will buy.
Are software companies looking at this? For the most part, no, mainly smaller accounting software providers that are targeting smaller to medium sized businesses. Most of US software companies are not being proactive except for companies such as Oracle and SAP that have the solutions already to go. Other companies don’t have the solutions at all.
EPS will assist you to review your system compatibility with IFRS reporting. To comply with IFRS requirements, your software has to be compatible with the new standards. EPS can assess with the compatibility of your current financial software.
- Solution Development and Implementation
If your current system is not compatible with IFRS, EPS has a Solution that is IFRS compatible with all the financial tools needed to meet this new regulation.
EPS can provide you with the SAP Fast Financial Module which can be implemented in less than 30 days. You do not require the entire SAP ERP platform – just the financial module.
The Solution will employ the same proven, bullet-proof software platform used by industry leaders like RIM, Loblaw, Bombardier, and tens of thousands of small and large companies globally for a fraction of the price.
EPS will help you develop an internal structure to manage the changes ahead in an effective, efficient and successful manner.
