IFRS Impact Reaches Beyond Finance Department Boundaries

June 8, 2010 - Calgary, AB. Six months left to go in a 3 year journey to complete the transition International Financial Reporting Standards (IFRS), Calgary organizations are grappling with the far reaching implications, time commitment and cost of conversion.

IFRS, which relies heavily on professional judgement to implement, is widely open to interpretation. Developed by the London-based International Accounting Standards Board (IASB), IFRS has been widely adopted by over 100 countries – with Canada being the latest country to sign up.

Canadian public companies must eliminate the use of Canadian Generally Accepted Accounting Principles (GAAP) and convert to IFRS by January 1, 2011. “The implications for accountants, attorneys, chief financial officers, corporate directors and multinational corporations are significant and immediate. Not to mention auditors, investment advisors and financial institutions with increased demands to learn and interpret the new rules,” says Cathy McIsaac, Managing Partner of Agility Factor Inc. (AFI) “A successful transition is absolutely critical to the future success and strategic planning of all organizations in Calgary.”

The move to IFRS will introduce changes in how financial information is collected, categorized, reported and disclosed. It will require:

• Accounting policy changes
• Re-evaluation of Sarbanes-Oxley compliance
• Training on the differences between the old and new reporting standards
• Financial scrutiny of international joint ventures
• Accounting reviews of merger, acquisition and divestiture deals
• Analysis of international credit policies
• Due diligence to avoid potential litigation risk due to an inappropriate application of IFRS

“Many executives believe their companies are well positioned for transition to IFRS but, with six months left to go, we are definitely still in the throws of preparation in Calgary,” says Kevin Litzenberger, Partner, AFI. “IFRS relies on professional judgement to implement and we all know that the devil is in the details. Strong change management is the key to an effective transition to IFRS.”

Every company is unique in the amount of change required by IFRS. In principal the differences are minor; however in practice the differences are major. SOX and Bill 198 requirements add complexity not seen in other countries as Canada is the first to implement IFRS in a SOX environment. To that end Canada will set the bar for the U.S. to follow as American companies will not transition until 2015.

AFI is a consulting firm based in Calgary, Alberta. Specializing in organizational change management, AFI helps leaders make distinct, lasting and significant improvements to the performance of their organizations.

For more information or to request an interview:

Janice Andersson
Associate, Communications, Agility Factor Inc.
info@agilityfactor.net
403.270.3342