IFRS Convergence is Here Now
I recently had the opportunity to speak at a SAP Insider conference in Barcelona Spain. During the conference I was able to talk with several customers and other Partners regarding their views of the IFRS adoption process.
Two general observations became apparent during these conversations.
First – The initial sense of urgency caused by the early IFRS adoption date of 2014 seems to have died down. In its place is a more controlled and thoughtful approach to the entire problem of compliance. Since the potential IFRS adoption guideline has been pushed back to at least 2015 companies now have more time consider strategic questions such as release upgrades or financial landscape transformation projects.
Second – And more importantly the ongoing issue of accounting convergence is now taking a much higher priority than in the past.
In a sense the convergence process has been called “IFRS Adoption by Stealth”. In other words IFRS adoption is still taking place although at a slower pace and without the sense of a firm deadline for total compliance.
This convergence process is being guided by various working groups made up of members from both the FASB & IASB boards. These groups have formed working groups to consider various accounting rule changes. The outcome of this effort has a Joint Working Plan for IFRS convergence.
The overall plan is now broken into 3 separate parts or “rounds”. Each round has a separate date of completion. Round 1 consists of 4 accounting rules with a final standard issued by 6/2011. Round 2 also consists of 4 accounting rule changes with the final standard issued by Q2/2011. Round 3 consists of two rule changes with the final standard due Q4 2011.
Prior to each final date listed above, there also other steps concerning Exposure Drafts, Gathering of Comments, and Round Table meetings regard all the proposed changes.
For those who are currently engaged in the IFRS conversion issue, the convergence process should now taking a higher daily priority than the overall IFRS adoption process. Although the initial sense of urgency about IFRS adoption seems to have lessened, the priority and the sense of urgency should be transferred to the convergence issue today.
For further information regarding convergence please link to the AICPA web site and click on the IFRS update option.
And final thought. You can also link to a series of EcoHub recordings on various IFRS topics.
The link below will guide you to a recent EcoHub recording highlighting some issues the Financial Sevices Industry is facing with the adoption of IFRS