IFRS Adoption for Small- and Medium Cap Companies

Transcription

1 IFRS Adoption for Small- and Medium Cap Companies Gord Fowler, Vice-Chair, Accounting Standards Board Carla-Marie Hait, Chief Accountant, British Columbia Securities Commission Ian Hague, Principal, Accounting Standards Own views not those of AcSB, CSA or other staff 1

2 When is adoption required? Opening balance sheet Interim F/S IFRS Reporting date <6 months Cdn. GAAP & IFRS Jan. 1, 2008 Preparatory period Jan. 1, 2010 Jan. 1, 2011 Dec. 31,

3 All systems go for 2011 adoption Balance of factors: Five years lead-time Importance of a date certain Relatively stable platform of IFRSs Limited period of C-GAAP falling behind Desire to drop IFRS-US reconciliation Desire for common global reporting EU Equivalence Many enterprises in advanced stages of preparation No delay is contemplated 3

4 Why should I start now? Need to evaluate size of task Some policy choices / elections need to be made before transition date (e.g., hedging) Need to access resources Etc. 4

5 MD&A Requirements Discuss plan Accounting policies IT and data systems Internal control over financial reporting Disclosure controls and procedures Financial reporting expertise Business activities Impact on financial reporting Update as go forward with quantitative impacts if available 5

6 Getting to the changeover Where do I start? IFRS is not a foreign language many similarities at principles level Start with your existing financial statements and accounting policies Identify your key accounting policies Use GAAP comparisons to identify relevant IFRSs and preliminary assessment of differences Study relevant IFRSs (Devil is in the details) Focus attention on biggest issues 6

7 Next steps Prioritize Evaluate need for help Document decisions and key considerations Consider longer-term needs not only shortterm conversion Keep key individuals informed including Audit Committee and auditors 7

8 Filing the first quarterly report Compliance with IAS 34 Include opening balance sheet Comparatives for Q Notice if not subject to auditor review 8

9 Filing first annual report State compliance with IFRSs If desired, also state compliance with Canadian GAAP Statement of compliance and auditor s report should match 9

10 Other regulatory considerations Use of US GAAP Use of different accounting principles for different financial periods Filing extensions for first interim filings Acquisition statements Acceptable auditing standards 10

11 Planning More than a technical exercise Opportunities and challenges Need to thoroughly assess accounting policies Start thinking in terms of IFRSs More than just accounting User relations Performance measures Covenants, etc. 11

12 Planning Changing Standards Many similarities between IFRSs & Cdn GAAP Today s IASB project is tomorrow s Canadian GAAP for Publicly Accountable Enterprises Therefore need to focus on what will be in place in the future, not solely on what is in place today 12

13 Many IFRSs remain unchanged through 2011 Inventories Accounting Policies & Accounting Changes Events after the Balance Sheet Date Property Plant & Equipment Government Grants Foreign Currency Borrowing Costs Related Party Disclosures* Associates Hyperinflation Interim Reporting Impairment Intangible Assets Investment Property Agriculture Share-based Payments Business Combinations Extractive Activities Segments * Minor amendments expected 13

14 Some significant changes in the works Consolidation (2009) Derecognition (2010) Financial Instruments (2009 & 2010) Non-financial liabilities (2009) Also look out for fair value measurement (2010) income taxes (2010) and rate-regulation (2010) Issued 2009 probably effective 2011 Issued 2010 probably effective

15 IFRS 1 First-time adoption Basic principle retrospective application But significant relief provided Choices need to be made New amendments helpful to Canada Full cost oil and gas Reassessment of Leases 15

16 Learning from others Don t forget disclosures Communicate about the changes keep users informed Comprehensive training Industry groups effective share experiences Proportionately greater challenge for smaller entities Evaluate your needs NOW 16

17 Resources IFRSs on Knotia, Omnibus ED, IASB web site will be in the Handbook by PAEs adopt IFRSs without modification as Canadian GAAP all Canadian GAAP falls away (for PAEs) Interpretations by IFRIC only Focus of attention becomes on IASB in London 17

18 Other IFRS resources IASB web site AcSB web site What s changing when? NEW Canada/IFRS GAAP Comparisons two levels AcSB s IAC Meeting Notes, Bulletins, etc. IFRSs: Guide for Procrastinators NEW Major accounting firms Newsletters, webcasts, publications, illustrative financial statements, training materials, etc. etc. 18

19 CSA Staff Notices, Etc. CSA Staff Notice Issues relating to changeover to IFRSs (May 2009) CSA Staff Notice Early Adoption of IFRSs, Use of US GAAP and References to IFRS- IASB (June 2008) CSA Staff Notice Disclosure of Expected Changes in Accounting Policies Relating to the Changeover to IFRSs (May 2008) 19

20 Questions/comments?