International Financial Reporting Standards and What it Will Mean for Your Company
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Conversion to International
Financial Reporting Standards ( IFRS) from US Generally Accepted Accounting
Principles (US GAAP) is more than an accounting exercise. For many companies,
it can significantly affect the financial reporting for certain aspects of the
entity. Hence, the need for proper planning is imperative.
Executives need an early understanding of the potential ways in which
conversion to IFRS may affect their accounting policies, people, information
systems, and controls. IFRS include a specific standard that sets out all
transitional requirements and exemptions available for first-time adopters.
For instance, an opening balance sheet is prepared at the date of transition to
IFRSs, which is the beginning of the earliest comparative period on the basis
of IFRSs. Accounting policies are chosen from IFRS in effect at the reporting
date. Generally, those accounting policies must be applied retrospectively in
preparing the opening balance sheet and in all periods presented on the basis
of IFRS. However, retrospective application of changes in accounting policy is
prohibited in some cases. At least one year of comparative financial statements
must be presented on an IFRS basis, and first-time adopters may report
initially in either annual or interim financial statements
For more information on getting started, see an article published by The CPA Journal in October, 2009 on
"Planning Ahead For IFRS 1" at http://viewer.zmags.com/publication/742328e2#/742328e2/26.
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Who We Are
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CFO Consulting Partners LLC
is a boutique financial
management consulting firm that specializes in
working with small to midsized public and private companies to provide operational, accounting, and risk management services.
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