Friday, September 26, 2008

Guidance on the IT implications of IFRS conversion

Microsoft Paper on IFRS conversion considerations, first published prior to the European conversion in 2005.

The paper International Financial Reporting Standards, IFRS (IAS) White Paper: Adoption of IAS in the EU by January 2005 was referenced in the discussions at the Economist Conference on IFRS last Tuesday. I thought that readers might like to review this document as it sets out some IT considerations on adoption of IFRS.

The document can be obtained here.

The document covers the IFRS implications applied to Microsoft Dynamics GP but it is also useful for considering the IT implications of IFRS in general. One caution is that it is quite dated but nevertheless a good first reference when considering IT implications.

It's interesting that the document does not appear to cover the issue of component depreciation (see my entry on this subject). At the seminar on Tuesday representatives of both Bell and Enbridge were substantially changing property plant and equipment systems to comply with the component depreciation aspects of IAS16, perhaps this is not earth shattering news given the substantial role that PPE plays in both organizations.

Clearly IT needs to be at the table early in an IFRS conversion project and I have spoken about this before.

One question that was asked at the Economist seminar related to XBRL, a system of data tagging. You may be aware that the SEC has set out a timetable for filers to furnish XBRL reports, but as yet the CSA in Canada has not mandated the submission of XBRL information. There did not seem to be a lot of support in the room on Tuesday for this additional layer of compliance. Some might suggest that why not incorporate XBRL into systems development plans while changes are being made for IFRS? On Wednesday I was at a seminar on XBRL where the benefits of XBRL were explained. The seminar was sponsored by XBRL Canada and you could say it was partisan. There are arguments that support the concurrent implementation of XBRL with IFRS and I will cover this in a piece I am preparing.

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