GENERAL OVERVIEW AND THE ROADMAP TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTION IN NIGERIA OBAZEE, JIM OSAYANDE FINANCIAL REPORTING COUNCIL

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1 GENERAL OVERVIEW AND THE ROADMAP TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTION IN NIGERIA by OBAZEE, JIM OSAYANDE FINANCIAL REPORTING COUNCIL

2 Introduction IFRS and Nigerian Accountants 2

3 Countries are defining their road maps 3

4 4

5 Government s concern Attraction of Foreign Direct Investment (FDI); Assurance of easier access to external capital for local and domestic companies. Easier regulation of financial information of entities in Nigeria. 5

6 A Road map committee was inaugurated on October 22, The Road Map committee s report was submitted January 26, Government took a decision on July 28, 2010 to adopt IFRS by major overhaul effective January 1,

7 Issues considered by the Roadmap committee Should IFRS for Nigeria come as a quick fix or major overhaul? When, for instance, should reporting entities begin to use IFRS voluntarily before a national agenda mandates its use? What are the implementation challenges and steps to address them during the transition. What effect will adoption of IFRS have on private companies, SMEs, Micro-entities, NGOs and Not- For-Profit Organisations. 7

8 What should be our national response to international accounting standards that are less rigorous to some peculiar accounting problems arising from our jurisdiction. What should be our national response to industry specific accounting activities that are either not in the work plan of IASB or still at the theoretical stage in their agenda but, urgent to us due to national specificities. What should be the authority of IASB s pronouncements. 8

9 What impact will adoption of IFRS have on regulatory/statutory and tax reporting? Since IFRS is fluid, how should our jurisdiction handle this dynamism? How do we handle enforcement, legal and technical issues? What will be the future role of the NASB in the entire compose? 9

10 Nigeria s Road map 10

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12 Implications of the Decision Consumers of Financial Data IFRS Software Vendors Tertiary Institutions NASB Government Companies Accountants (Public/Private) Accounting Firms/ Institutes 12

13 NASB IASB National GAAP National Accounting Standards IFRS IFRS IAS IFRSIC SIC 13

14 NASB 14

15 National support for effective transition Public sensitization Pass Financial Reporting Council Bill into Law IFRS for SMEs: Consultation with NACCIMA Creation of IFRS Academy NUC to update syllabus of Tertiary institutions. Creation of a dedicated Website Review existing legislation that are inconsistent with effective implementation of IFRS Update of Information Technology (IT) Systems and Chart of Accounts in the public sector. 15

16 Direct in period of dual reporting The approach will require GAAP reconciliation through either of two options: The traditional IFRS first-time adoption reconciliation. One requiring that step plus an ongoing unaudited reconciliation of the financial statements from IFRS to Nigerian GAAP. 16

17 On non Technical accounting issues Help desk to assist in assessing other issues like tax, internal processes and controls, regulatory and statutory reporting, technology infrastructure, and organizational issues 17

18 Tertiary institutions Linkage and awareness programme Course content for Tertiary institutions Train the Trainers 18

19 Accounting firms Technical Partners Forum Liaison meetings 19

20 Factors that will guarantee success The right skills The right equipment The right mindset 20

21 CONCLUSION 21

22 There are world-wide emerging pressures with growing competition, globalisation and technological innovations which will, if it has not, compel market operators to change. NASB

23 At such, a higher standard of financial disclosure, better information for market participants capable of underpinning disclosure-based regulation and better ability to attract and monitor listings by foreign companies which obviously will help capital access and mobility capable of promoting economic growth is a sine qua non.

24 THANK YOU NASB 24