International Financial Reporting Standards (IFRS)
What is IFRS?
The EU wishes to develop a single capital market, and has agreed the Financial Services Action Plan to try to achieve this. One element of this is to have a common "language" for the financial information provided to that single market - in other words common accounting standards.
IFRS are produced by the International Accounting Standards Board (IASB) whose objective is to produce a single set of high quality accounting standards for use by participants in global capital markets and others.
Who Is Affected?
At a minimum, from 2005 all listed companies in the UK (along with the rest of the EU) will have to prepare their consolidated accounts based on International Financial Reporting Standards (IFRS) instead of complying with UK accounting standards issued by the UK Accounting Standards Board (ASB).
Member states have the option to extend the impact either as a requirement or as an option to other sorts of company and accounts. The Department of Trade and Industry (DTI) has confirmed that all UK companies may choose to adopt them from 2005. Whilst private companies whose stocks are not listed on a stock exchange or smaller companies currently have the choice whether to implement them or not, the DTI is considering whether or not to enforce the standards on these companies.
What Does It Mean?
The introduction of IFRS will have a great impact and represent major change. Great preparation - technical, strategic and operational changes - will be required. And, if a recent survey by PricewaterhouseCoopers is correct, around 60% of European companies affected have not started preparing.
If you have not yet started planning or implementing the changes required then the Institute of Chartered Accountants in England and Wales suggests that you start detailed planning now. Organisations who have already implemented the new IFRS offer two pearls of wisdom: do not underestimate the impact of IFRS and don't leave it until the last minute.
How Can Foundation Systems Help?
We have already held two IFRS Seminars in the last few weeks where both customers and non-customers gained a better understanding of the what, who, how and when of IFRS, and the ways in which SunSystems will help organisations meet the requirements of IFRS.
But if you were unable to attend the seminars we can still help. Very soon our customers can take advantage of an IFRS ‘audit’ service which will comprise:
- Completion of an IFRS questionnaire with one of our consultants to assess the extent to which IFRS will affect your organisation
- Production of a recommendations report based on the questionnaire detailing the changes required to your SunSystems configuration
- The option to use our trained consultants to implement the required changes based on an IFRS Consultants’ Briefing, or to purchase a copy of the Briefing to implement the changes yourself.
The IFRS Consultants Briefing has been produced by Systems Union, the authors of SunSystems, and gives a detailed explanation of the requirements of each Standard and how SunSystems should be configured to meet those requirements.
If you are interested in learning more about the IFRS ‘audit’ please contact your Account Manager or send an email to info@foundationsystems.co.uk.
Download more information about IFRS.
