IFRS Transition Advisory Services

Request a copy:

IFRS: CSA Mandated Disclosures

Equity reconciliation used to prepare opening IFRS compliant balances with supporting adjusting entries

 

For more information, please contact:

Mathew Kinver, ACCA, CertIFR
Phone: (403) 605-4077
mkinver@sunera.com

Shawn Hendry, CIA, CISA
Phone: (403) 206-3050
shendry@sunera.com

Canadian Office Locations:

Calgary, AB
855 8th Avenue S.W.
Suite 200
Calgary, AB T2P 3P1

Toronto, ON
185 The West Mall
Suite 1030
Toronto, ON M9C 5L5

Vancouver, BC
Bentall Centre - Twr II
555 Burrard St. Ste 900
Vancouver, BC V7X 1M8

Either use the contact information above to contact Matt or Shawn directly or use the email form below and one of Sunera's IFRS experts will contact you.

Full Name:

Title

Company:

Phone:

E-mail:

Inquiry:

Conversion Planning & Support

The impact in adopting International Financial Reporting Standards (IFRSs) goes beyond the choice of a uniform accounting language, designed to bring greater clarity to financial reporting, as well as, comparability and consistency on a global scale.

Required changes in transaction measurement and account disclosure means transitioning to IFRS will have an impact on your IT infrastructure service capabilities, the relevant financial reporting applications and the underlying business processes that support financial reporting. Moreover, the impact of IFRS on systems and processes will be as a result of information requirements not being easily accessible from existing systems without significant modifications being required; changes to accounting estimates and non-routine calculations, accounting structures changing because of new accounting policy adoption, and management reporting needs being impacted for consolidation and reporting disclosure changes.

To-date, organizations have relied on Sunera professionals to assist them in improving the design and operational effectiveness of their internal controls over financial reporting. Similarly, we view the transition to IFRS as an opportunity to make improvements along a number of related fronts:

• Financial accounting and reporting systems will evolve to where both internal (ie. senior and operational management) and external (Board of Directors and Investors) stakeholder information requirements can, and will, be met sufficiently;
• Training requirements for staff and management will need to be redefined, upon appreciating the skills and knowledge bases needed to generate and report new accounting information;
• Accounting policy choices will be made with a clearer understanding of the impact on key performance measurements and indicators, while ensuring alignment with industry peers and;
• Improved communication to relevant stakeholders should promote greater accountability and transparency

Our goal is simple – to enable your organization to adopt and communicate, with confidence and authority, all relevant changes and enhancements to systems, controls, processes and staff by way of a smooth transition to the new accounting standards.

Sunera professionals are available to assist management in a number of ways, including, but not limited to, the following:

1. Applying an initial diagnostic in order to identify Canadian/IFRS accounting differences, and thereby communicating key issues (via gap analysis) to management
2. Preparing new policies and procedures in order to satisfy a need for upgrading and achieving new skills at all levels
3. Preparing note disclosures prior to conversion, as well as, first time interim and annual financial statements
4. Assessing, measuring and communicating impacts to the business’s performance, by virtue of adoption of new standards, and the allowable choices within each
5. Prescribing business process, control and system changes as necessary in order to successfully transition to new operating practices
6. Identifying corporate governance changes resulting from IFRS adoption

IFRS Conversion Timelines in Canada

2008 -	Organizations should disclose their plans, by end of fiscal 2008, for convergence and what anticipated effects will arise with the change to IFRS, on its financial statements
2009 -	Organizations will be required to disclose a more detailed convergence plan, including quantification of anticipated effects, by end of fiscal 2009, effectively marking the beginning of transition date to IFRS
	Financial statements to be prepared under current, local GAAP
2010 -	Organizations are required to start collecting IFRS data in 2010 to build the 2010 comparable financial statements (including an opening IFRS balance sheet for Jan 01, 2010)
2011 -	Change over date effective January 1, 2011 for all publicly accountable enterprises
	IFRS compliant statements need to be prepared for Quarter 1, 2011, including comparatives for 2010

Download the complete timeline with critical dates here:

IFRS Proposed Conversion Timeline

• Update on the progress of the IFRS changeover plan and detail about key decisions and changes made or to be made, including decisions about choices under IFRS 1 (Accounting Policies) and other IFRSs in the MD&A in the interim MD&A
• Decisions about accounting policy choices under IFRS 1 should be discussed in the annual MD&A
• If quantified information about the impact of IFRSs on key line items in the financial statements is available, this should be included in the annual MD&A

Assessing IFRS Impact - Beyond Financial Accounting & Reporting

Control Environment	Finance & Business Processes
Policies and procedures Efficiency of finance department Internal control documentation Audit committee involvement	Accounting policy selection Regulatory requirements Benchmarking to relative peer groups Strategic plan impact (tax impact) Business performance metrics Volatility of earnings and equity Compliance issues with multi GAAP Compensation plan changes
Training & Resource Requirements	Business Information Systems
Training and education Employee benefits Investor relations Complex project management Resources internal and external Budgets Executive understanding and oversight	Chart of account changes Financial close implications Key performance indicators Management reporting Data collection Financial statements presentation

 

IFRS will pose some unique challenges, as illustrated below, to key internal stakeholders, notably – Strategic Management, Finance & Accounting, Treasury, Human Resources and Information Technology.

Strategic Management – acquisition analyses requires IFRS-based data to drive asset based or earnings based due diligence modeling assumptions;

Finance & Accounting – accounting structures and account classifications will change, as will therefore, budgeting, forecasting, and key performance indicators; process and control documentation will require updates for SOx and ICOFR Certification;

Treasury – financing decisions can be impacted directly by IFRS choices on debt covenants and hedge accounting;

Human Resources – requiring resources over an 18-24 month period, in the face of competing priorities, will undeniably challenge staffing models; training plans will be required to identify all user groups whose needs vary wildly – from Finance staff impacted at the transaction and process level to senior management who need to understand and explore the “new” numbers; choice of IFRS will produce earnings volatility which impact performance bonus plans, while employee incentive plans could be impacted by changes to share-based payments

Project Work Streams

DETAILED PLANNING, IMPLEMENTATION & REVIEW

Once the Preliminary Impact Assessment review is complete, and the findings are summarized, it is critical to maintain momentum and begin the design and planning components of the conversion. The design and planning, and implementation phases are the most in-depth and time consuming components of the transition. Work streams to consider during the transition include:

• Changes to accounting policy and financial impact
• impact on procedural documentation
• Changes to key financial proccesses
• Documentation/support for policy changes/decisions under IFRS

• Nature and extent of the COA changes depends on finance/systems requirement
• Consider a holistic approach for implementing finance applications
• What are the requirements for and how to the implement an effective IFRS compliant COA

• Data gaps - existing vs. new data needs
• How to get reliable data for IFRS adjustments to produce opening Balance Sheet
• Data mapping, mining & other data mining techniques
• Changes in accounting treatments may require system changes
• Changes to systems calculations or other transactional routines
• Changes to master data & consider control implications

• Evaluation and potential modifications to compensation (bonus) policies
• Organizational KPI's may need modification

• Finance staff will require IFRS training
• Broader awareness of the issues/differences under IFRS
• Executives need to be able to understand and explain changes in accounts/disclosures

• Maintain ongoing compliance during conversion and thereafter
• Conversion to IFRS and impact on data, processes, systems - has pervasive impact on financial reporting and disclosure risk
• Changes/maintenance of ICOFR documentation of process/control

Special Consideration – Impact on IT Control Environment

IFRS transition will mean an impact on your current internal control over financial reporting and process documentation. Necessarily, control activities and risks of ‘what could go wrong’, may change, as a result of accounting and systems changes.

Consequently, there are key considerations surrounding choices over information technologies, and quality standards for data accessibility, availability and integrity. Questions to ask yourself:

• Does your current IT infrastructure permit ease of access to IFRS information?
• Can data be obtained by reconfiguring systems appropriately, and at what cost? Over what time frame?
• Can your systems generate, store, and report two sets of financial data, one for IFRS and one for current Canadian GAAP, as required one year prior to cut-over dates?
• How capable are your systems in producing error-free financial statements, under both reporting standards, and what are the implications on your IT environments that support application systems, enabling critical computer operations to satisfy relevant controls in support of significant accounts impacted by IFRS?

Timing and scale of impact as a result of IFRS means reviewing your IT strategy over the near term, identifying constraints in the form of competing strategic initiatives as it relates to existing IT systems projects, consideration given to planning of system changes, and making upgrades in light of the timing proposed by IFRS timelines.

	Follow Us
	Network with Us
	Become a Fan