Академический Документы
Профессиональный Документы
Культура Документы
Presenters:
Duaine Smith/Saad Bounjoua PricewaterhouseCoopers
Objectives
PricewaterhouseCoopers
Slide 2
What is IFRS?
PricewaterhouseCoopers
Slide 4
Why IFRS?
PricewaterhouseCoopers
Slide 5
More than 100 countries require or permit the use of IFRS, or are converting
Top 10 Global Capital Markets
US
US GAAP
Japan
Converging to IFRS
UK
IFRS
France
IFRS
Canada
Converting to IFRS
Germany
IFRS
Hong Kong
IFRS
Spain
IFRS
Switzerland
IFRS or US GAAP
Australia
IFRS
PricewaterhouseCoopers
Slide 7
Standard setterInternational Accounting Standards Board (IASB) founded in 2001 and based
in London
- Goal: Provide the worlds integrating capital markets with a common language for financial
reporting
Predecessor organization was International Accounting Standards Committee (IASC) founded in 1973
PricewaterhouseCoopers
Slide 8
PricewaterhouseCoopers
Slide 9
PricewaterhouseCoopers
Slide 10
PricewaterhouseCoopers
Slide 11
PricewaterhouseCoopers
Slide 12
Improved
transparency and
comparability
for investors and
rating agencies
More effective
procurement with
vendors and
customers reporting
under IFRS
Industry perception
of market leadership
Ability to secure
scarce IFRS
knowledge resources
and optimize human
capital deployment
decisions
IFRS:
Uniform
Global
Accounting
Language
Streamlined
M&A activity
Sufficient time to
adequately debate
strategic first time
adoption in
particular with look
back provision
Ability to analyze
impact on
tax-related issues
Reduced cost of
financial reporting for
global companies
PricewaterhouseCoopers
More efficient
access to capital for
global corporations
Ability to understand
interaction with
strategic initiatives
to generate value
from synergies
Slide 13
PricewaterhouseCoopers
Slide 15
Responsive to users
needs for clarity
and transparency
Consistency with a
clear conceptual
framework
Criteria for
principles-based
standards
Based on an
appropriately
defined scope
PricewaterhouseCoopers
Written in clear,
concise and plain
language
Slide 16
Consolidation of
entities
Tax accounting
Recognition and
measurement of
provisions
Derivatives and
hedge accounting
Impairment testing
methods
Capitalization of
R&D
Asset retirement
obligations
Securitizations /
Derecognition
Revenue
recognition
Measurement of
inventories
Classification and
measurement of
financial
instruments
Accruals
Employee stock
compensation
LIFO
PricewaterhouseCoopers
Slide 17
Number of
Net
income
reconciling
items
BASF
Equity
Key differences
-4%
2%
Pensions
Acquisitions
Deferred taxes
Akzo Nobel
-13%
73%
16
Income taxes
Derivatives
Syngenta
-21%
-11%
13
Purchase accounting
Rhodia
-76%
19%
Pensions
Cumulative translation
adjustment
Capitalized development
costs
Depreciation on revalued
PP&E
Capitalized interest
n/a
Sinopec
1%n/a
Sanofi-Aventis
1%
1%
Application of IFRS1
Business combination
Restructuring
Eni
9%
-4%
10
Successful efforts
accounting
Inventory valuation
-3%
-6%
Retirement benefits
Currency translation
differences
Reversals of impairments
Total SA
-3%
78%
10
Acquisition
Financial instruments
PricewaterhouseCoopers
Slide 18
PricewaterhouseCoopers
Slide 20
TransitionIFRS methodology
PricewaterhouseCoopers
Slide 21
Training:
- At different levels
- Not only Finance people
Changing Processes
Existing processes to be enhanced:
- Not adequate with volume
- As alternative to system change
Changing Systems
Data availability and system
requirements
New systems components: data
warehouse, calculation engine
Re-alignment of management
information systems
Multi-GAAP solutions
Primary GAAP changeover
Changing Business
Performance management to be embedded across :
- Performance measure/KPIs
- Management accounts
- Remunerations/bonuses
- Budgeting/forecasting
- Financial and Business impact analysis: debt covenants
- Different valuations
PricewaterhouseCoopers
Slide 22
PricewaterhouseCoopers
Slide 24
PricewaterhouseCoopers
Slide 25
PricewaterhouseCoopers
Slide 26
PricewaterhouseCoopers
Slide 28
Inefficiencies
- Not enough coordination between the parent and subsidiaries
- Lack of knowledge transfer
Increased risk over financial reporting
- Need for topside entries
- Ensuring process and controls reflect the changed accounting
standards and language
Focus on recognition and measurement
- What will the accounts actually look like
- Education around depth and extent of new disclosures
PricewaterhouseCoopers
Slide 29
IFRS is not simply a financial reporting issue - it is pervasive across the business
An IFRS conversion can take on average 18 to 30 months
IFRS resources are scarce and companies should begin to increase their IFRS knowledge
Audit Committees and Boards are starting to ask about IFRS
Policy
Consideration
IFRS could be impacting you today if a subsidiary is adopting IFRS and determining
IT
IFRS requires comprehensive and clear documentation on Day 1 e.g. hedges
Acquisition
Integration
Market
Consideration
IFRS
Being seen as a front runner in the adoption of IFRS in the US
PricewaterhouseCoopers
PricewaterhouseCoopers
Slide 31
PricewaterhouseCoopers
Slide 32
PricewaterhouseCoopers
Slide 33
PricewaterhouseCoopers
Slide 34
Establish the tone at the top and set up the right governance structure and clear
decision-making powers.
Develop a conversion plan that takes into account peaks and valleys of activity
(e.g. quarterly reporting).
Consider how IFRS will impact KPIs and your internal and external
communication strategy.
Take steps early to communicate with and influence regulators, tax authorities and other stakeholders around the
impact and acceptance of IFRS.
Become knowledgeable with the standard-setting process, as IFRS will continue to evolve during
implementation.
Make the most of opportunities for other project efficiencies (e.g. faster close process).
Consider opportunities for reporting rationalization/streamlining (e.g. multi-GAAP reporting, tax balances).
Implement at the business unit level using a top-down and bottom-up approach, with business units involved
earlier rather than later, as the impact can be profound.
PricewaterhouseCoopers
Slide 35
Key Messages
So What Now?
PricewaterhouseCoopers
Slide 37
PricewaterhouseCoopers
Slide 38
PricewaterhouseCoopers
Slide 39
PricewaterhouseCoopers
Slide 40
Contact Information
Duaine Smith 1 646 471 4440
duaine.smith@us.pwc.com
Saad Bounjoua 1 646 471 1088
saad.bounjoua@us.pwc.com
PricewaterhouseCoopers
Slide 41