systems should not be underestimated or left too late in the
planning process, according to a paper from Deloitte US.
The paper focuses on the planning process necessary for
companies to implement the right technology systems, processes and
controls to ensure a smooth transition to IFRS.
It warns that viewing IFRS simply as a reporting change can lead
to a costly rework at a later date, result in cumbersome processes
and increase control requirements.
Deloitte US IFRS Solutions Center leader DJ Gannon commented:
“Adoption of IFRS is not just about understanding technical
accounting differences. Companies will need to understand the
impact such differences have on technology and information
Deloitte IFRS Solutions Center principal Glen Feinberg added:
“IFRS adoption generally can’t be accomplished by finance alone.
Technology executives and their functions should be brought into
the visioning and planning stages early in order to avoid a
potentially costly rework at a later date.
“As adoption rules outside of the United States are running on
various timetables, it is also important to have a global strategy
around adoption to avoid reimplementation for international sites
once the US organisation determines its approach.”
The Deloitte paper, Technology Implications of IFRS Adoption
for US Companies, advises companies to take four steps in
preparation for IFRS. These include identifying all internal and
external data sources that need to be migrated and assess required
enhancements to legacy systems; assessing high-level changes to a
company’s chart of accounts based upon differences between IFRS and
local US GAAP; and analysing the reconciliation process between
subledgers and the general ledger with attention to journal entry
methods and templates.