Financial Lending Notes
September 29, 2009

It’s Not Too Early to Start IFRS Planning

There has been plenty of speculation in the past couple of years about the implementation and potential impact of the adoption of International Financial Reporting Standards (IFRS) in the U.S. The SEC clarified some of the uncertainty with the release of its “IFRS roadmap” in late 2008.

The roadmap identifies seven milestones leading up to the possible mandatory transition to IFRS for all U.S. companies starting in fiscal years ending on or after Dec. 15, 2014. However, certain U.S. issuers could be given the option of using IFRS as soon as this year — specifically, for fiscal years ending on or after Dec. 15, 2009.

The first four milestones involve issues to be addressed before mandatory adoption of IFRS, such as improvements in accounting standards and in the ability to use interactive data for IFRS reporting. The last three address the transition plan for mandatory use of IFRS, including suggested criteria for candidates for limited early use.

Thus far, two broad approaches to the conversion have been suggested: the all-in approach and the tiered approach. All-in encompasses a relatively short time frame, during which all reporting entities within a bank would be converted simultaneously. It would require dedicated bank project teams and significant organizational resources. Conversely, the tiered approach would phase the conversion in more gradually and spread costs and resources out over a longer period of time.

While 2014 may seem like a long way off, experts suggest it’s time to set up your IFRS conversion roadmap. A successful conversion effort of this magnitude will require a lengthy ramp-up period. In fact, the AICPA states that it considers a one-year timeline to be reasonable for the IFRS transition. With this much notice, there’s no reason this conversion has to resemble the panic and chaos that has often accompanied major compliance initiatives such as Sarbanes-Oxley and the Y2K computer conversion.

For additional information on how changes in the Mark-to-Market accounting standards will impact your business please contact Timothy R. Messman, CPA with Porter Keadle Moore LLP, at tmessman@pkm.com.

  

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Porter Keadle Moore, LLP (PKM) is a full service accounting firm based in Atlanta, Georgia. PKM offers audit, tax and systems services to clients throughout the country. The firm focuses its efforts on companies registered with the Securities and Exchange Commission (SEC), community banks, the insurance industry, technology and life sciences companies and the real estate/construction industry.

Follow this link to learn more about PKM's banking practice.
 

To discuss this article contact Tim Messman, CPA with Porter Keadle Moore, LLP at tmessman@pkm.com.

Tim provides accounting and auditing services to financial institutions as well as clients in the construction, service, technology/life sciences and manufacturing/distribution industries. He routinely works with companies registered with the Securities and Exchange Commission; privately-owned companies and S Corporations. He has experience with Initial Public Offerings (IPOs), Mergers and Acquisitions, Sarbanes-Oxley compliance and internal control consulting.

 

Pat has over 23 years of experience in public accounting. He has worked with clients ranging from individuals to international Fortune 50 companies in a variety of tax consulting and compliance areas. He is most active in the real estate and banking industries, serving numerous clients across the Southeast. Pat has led PKM’s tax practice since 2003. Prior to joining PKM he was a partner with KPMG, where he spent 17 years of his professional career. You can contact Pat at ptuley@pkm.com.