Group Clients

IFRS First Time Adoption

As you know that IFRS are derived from fundamentals of IAS and it supersedes the IAS in many areas. The IASB (International accounting Standard Board) released IFRS 1 for first time adoption of IFRS. There are subsequent amendments to bring more improvements and to share stable standards. While adopting the IFRS for the first time, the IFRS application date has to retrospectively apply on the balance sheet and comparative periods. There are certain exceptions and exemptions needs to be considered while first time adopting IFRS within IFRS1.

Here is the key for swift switch to IFRS from balance sheet perspective

  • IFRS 1 precisely guides on firs time transition to IFRS. As per general accounting principle the all the companies has to comply with effective date at the balance sheet
  • Comparative & reconciled statements should be in reference to IFRS disclosure requirements
  • Entities has to recognize & derecognize all the assets liabilities from compliance perspective
  • Asset and liabilities should be measured in reference to IFRS changes
  • Key part is the accounting estimations based on the guidelines provided in IFRS

IFRS is not only purely accounting standard but it impacts the way businesses operate and the way you are reporting and needless to say it will also need changes in the ERP system to accommodate the accounting practices. The whole objective is to be compliant at transactional level, accounting and reporting level. While adopting the IFRS, there are significant challenges we would be addressing at every phase

  • Organizational challenges
    • There is significant cost and time required in conversion to IFRS
    • Extensive training and education required for staff, investors and board members
    • The change management is tedious and require time of acceptance
  • Technology Infrastructure challenges
    • Capability of ERP application in managing multi GAAP accounting during the transition
    • General ledger and chart of accounts including performance matric needs to be relooked
    • Issues related to capturing the transactional data
  • Process and Statutory Reporting Issue
    • Internal organizational controls and processes including documentation and testing
    • Response and amendment of continuous changes regulatory
    • Mergers & Acquisitions and treasury management related challenges
    • Multi Period Accounting

Our Services in IFRS

Core Consulting on IFRS

  • End to end business impact assessment in reference to IFRS compliance. Key elements of business impact assessment
    • Impact of IFRS on consolidated and statutory reporting and accounting policies
    • Impact on all the financial statements like Balance Sheet, P&L, Cash Flow & Statement of Equity
    • Reporting changes required to achieve complete compliance
    • Valuation of Inventories, Plants Equipment, impairment of assets, etc.
    • Revenue Recognition & Leasing process impact
    • Investments treatment post implementation of IFRS
    • Foreign Currency Transactions&Employee Benefits
    • Evaluate the impact on financial systems
    • Transition Provisions & Cutover Activities

Solution Deployment: IT Impact Assessment

  • Analysis of IT system changes required to accommodate new changes and accounting practices
  • Accounting and trial balance impact
  • Impact on any customizations in the system or interfaces with third party
  • Transition Approach for Pending Transactions in System & Outside System

Implementation & Conversion for migration to IFRS

Ongoing application support