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October 30, 2008

Brazilian firms lay IFRS groundwork

Accounting firms in Brazil are pouring significant amounts of money and time into IFRS training as the country prepares to adopt the international standards by 2011.

 

Some listed companies are presenting Brazil GAAP-IFRS reconciliation for their 2008 statements while other early birds are presenting their entire 2008 statements in IFRS. A result of this is growing demand for IFRS-related services.

PricewaterhouseCoopers Brazil (PwC) started its own readiness plan eight years ago, when it sent six partners to one and two-year IFRS programmes in Europe. Leveraging the knowledge they brought back, PwC now has approximately 600 knowledgeable professionals ready to serve this area.

“This is a major investment for a professional services firm and is certainly an important part of the annual $30 million budget for learning and development,” said PwC partner and management board member Henrique Luz.

“The largest companies have already started their IFRS projects, a few of them being ready by now. But the big wave is still to come. Approximately 500 companies will follow.”

That is the flip side of the new IFRS opportunities, noted Terco Grant Thornton managing partner Mauro Terepins. Firms have had to invest a good deal of money to train personnel to meet the new needs.

“We have a team specialised in IFRS here in Brazil that was trained both locally and abroad at Grant Thornton International,” he explained.

“Also, we bought an in-company training course from the Foundation Institute of Accounting, Actuarial and Financial Research of the University of São Paulo. As a result, our training costs have increased considerably.”

Nexia Villas Rodil head Ricardo Rodil said the costs for all firms will increase because there are not enough accountants in Brazil that are well-versed in IFRS. Recruiting could become an expensive bidding exercise.

He said legislation mandating the change to IFRS hasn’t really addressed all the conversion issues. A number of companies have to present their 2008 results using IFRS but how to best adapt Brazilian GAAP and what the impact on tax legislation will be are still being worked out.

Gundi Jeffrey

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