In the last Blog posting we talked about who IFRS would impact and some of the reasons why it isn’t simply a corporate job to take care of the implementation. Much will be discussed at SAPPHIRE and the upcoming Reporting and Analytics conference in Vegas in October about the mechanics of delivering an IFRS solution. However, given the unclear timeline from the SEC for needing to implement a solution, many IT and Finance executives I talk to are asking a different question:
What can I do now to get ready?
The first step is to understand what IFRS will mean for you. This involves answering some big questions.
Will I convert completely to IFRS or keep my current operational chart of accounts and treat the new standard as a reporting requirement?
Which areas of my financial policies will be impacted? Asset depreciation / capital treatment? Revenue recognition?
Will I consolidate solely on an IFRS basis or will I continue to consolidate results based on GAAP as well?
What countries need to be converted first / now?
Will I be able to implement a single global IFRS standard or do I have to deal with different national regulators interpretations
For the finance function, answering these questions and carefully documenting the required policy changes will jump start any implementation.
At the same time there are technology changes that can be made in advance of an implementation. Upgrading from pre New GL versions of R/3 ECC can be time consuming, depending on your footprint and level of customization. This can be completed independently from the policy decisions that need to be made. You can also develop your long term information delivery strategy and evaluate the products and opportunities that some of the new capabilities, especially Business Objects, offer.
Do these things and you will reduce the complexity, risk and cost of your IFRS implementation when you need to do it. How well positioned are you? And if you see me at SAPPHIRE say ‘Hi’, or stop by our booth for a chat.