It's 2008! Are your systems IFRS compliant?

Do you know where your Systems are with IFRS?



Last Thursday Business Finance Offered a webinar on IFRS entitled IFRS Readiness: Preparing for the Inevitable--Proactive First Steps for the 2009 Deadline"


On the face of it it this looked just like it would be yet another general discussion on IFRS readiness or at least preparedness. However if you looked at the list of speakers it would have given you a clue about the session. You can access the session at
http://businessfinancemag.com/webcast/ifrs-readiness-preparing-inevitable-proactive-first-steps-2009-deadline-0806.


You will have to register to view the presentation.

The presenters were

Zohair Mirza
Partner, Financial Management Practice
IBM Global Business Services

Craig Schiff
President and CEO
BPM Partners

Mark Corsetti
VP and General Manager
Tagetik, North America

The presentation included technology issues related to IFRS compliance and the experiences of clients of the presenters.

Issues include the need to capture additional data, for example for component depreciation calculations for property plant and equipment, control over data previously held (or currently held) in Excel worksheets, the need to perform dual reporting during transition and for IFRS1 purposes.

Much of the discussion though also related to choosing a good CPM ( Corporate Performance Management) or ERP (Enterprise Resource Planning - incorporates "general ledger") system in general. Clearly such systems have to be nimble enough to incorporate change and provide useful information to manage the business as well as regulatory requirements. I got lost at times in the presentation on what is IFRS specific and what is just best practice in choosing a system. You might be pleasantly surprised that your existing system is or can be made to be IFRS compliant. It seems to me that there is a big challenge to obtain additional information and calculations. This is a people task. How does a company control all those inputs from multiple sources?

One warning that everybody has is to take care with all those Excel worksheets. It's a wonderful program but there have to be rigorous controls around it. There is a fear that the closer we get to the transition date the more pragmatic we can become - e.g. adding worksheets. There is some evidence that such pragmatism may have happened in Europe when IFRS was implemented there. See, for example, the Canadian Institute of Chartered Accountants publication on 20 Questions that Boards should ask about IFRS conversions. The publication warns the following about the IFRS EU experience:

IFRS changes were often not fully embedded in back offices and general ledger systems. As a result, “stand alone manual workarounds” were created, including “spreadsheet accounting.” and the further consequences..

EU companies that used manual workarounds to meet short IFRS deadlines are now redesigning processes and augmenting their systems to eliminate the inefficiencies these workarounds created.

I have previously spoken about IT issues in this blog.


BusinessFinanceMag.com is a newly relaunched website, ""to be the source of the best new ideas and business practices for senior executives creating, leading, and transforming the finance function" (their words).