Thoughts On Preparing For Ifrs

Over the past few weeks, we have taken a brief look at IFRS and its possible impact on consolidation applications

. Now, it is time to look at what you can do to start preparing. The current answer is not much. Until the SEC decides on the if, when and how of the U.S. adopting IFRS, there are not a lot of concrete steps you can take. There are, though, some things you can do to prepare.

First

Start monitoring developments. Some useful websites are www.sec.gov, www.fasb.org and www.ifrs.org. The SEC is scheduled to decide this year, but of course, there is no guarantee they will.

Second

Start learning about IFRS and how it differs from U.S. GAAP. We have all been preparing financial statements with the same rules for years, so it has become second nature. With the introduction of IFRS, those rules may be changing. My accounting knowledge is a skill that sets me apart from my fellow consultants. It helps me guide clients in building a consolidation application. I know I will include IFRS in my CPE for the next few years, so I am ready if and when it comes to the U.S.

Third

Start thinking about how the differences between IFRS and U.S. GAAP could result in changes to your consolidation applicationi.e., what will you need to change in the application to report in IFRS? Keep in mind that IFRS will also result in changes to the transaction systems. This impacts the data that flows into the consolidation application. As such, how might the interfaces need to be changed? What about your planning process? Does that need to be updated for IFRS?

When you think about IFRS right now, there is really nothing but questions lacking any clear answers. But thinking about these things now will help prepare for the effort to implement IFRS. I remember when SOX was being implemented and one company I was working with got a very late start. It was a chaotic effort to say the least, and they expended a lot more effort than would have been required if they had shown some foresight and planned ahead. Thinking about how IFRS impacts applications is something we at TopDown Consulting will be looking at over the coming months. Our goal is to be prepared to guide our clients successfully through this process, whatever form it may take.

Fourth

If you are using Hyperion Enterprise, this is probably the catalyst to move to Hyperion Financial Management. There are several reasons why I say this, but most important is: If you have to rebuild an application to implement IFRS, do you really want to do that in a technology that is 20 years old? Enterprise has been a wonderful tool for many companies. But it will not give you the same flexibility that Financial Management will give you to build an IFRS application. This is the opportunity to do one implementation that addresses two issues at once.

Final Thoughts for Now

I am sure my thoughts on IFRS will evolve over the coming months as I learn more about it and we hopefully get some decisions from the SEC. And I will continue to provide updates here as more information becomes available.

by: Mike Arnoldy

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