Managing the transition to IFRS-based financial reporting : a practical guide to planning and implementing a transition to IFRS or national GAAP which is based on, or converged with IFRS PDF
Preview Managing the transition to IFRS-based financial reporting : a practical guide to planning and implementing a transition to IFRS or national GAAP which is based on, or converged with IFRS
Managing the Transition to IFRS-based Financial Reporting Lisa Weaver WILEY Managing the Transition to IFRS-based Financial Reporting WILEY Managing the Transition to IFRS-based Financial Reporting A Practical Guide to Planning and Implementing a Transition to IFRS or National GAAP which is Based on, or Converged with, IFRS Lisa Weaver Thiseditionfirstpublished2014©2014LisaWeaver. AllIFRSFoundationmaterialisCopyright©IFRSFoundation. Allrightsreserved.MaterialisreproducedwiththepermissionoftheIFRSFoundation®.Nopermissionisgranted tothirdpartiestoreproduceordistribute. Registeredoffice JohnWiley&SonsLtd,TheAtrium,SouthernGate,Chichester,WestSussex,PO198SQ,UnitedKingdom Fordetailsofourglobaleditorialoffices,forcustomerservicesandforinformationabouthowtoapplyfor permissiontoreusethecopyrightmaterialinthisbookpleaseseeourwebsiteatwww.wiley.com. TherightoftheauthortobeidentifiedastheauthorofthisworkhasbeenassertedinaccordancewiththeCopyright, DesignsandPatentsAct1988. Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmitted,inany formorbyanymeans,electronic,mechanical,photocopying,recordingorotherwise,exceptaspermittedbytheUK Copyright,DesignsandPatentsAct1988,withoutthepriorpermissionofthepublisher. Wileypublishesinavarietyofprintandelectronicformatsandbyprint-on-demand.Somematerialincludedwith standardprintversionsofthisbookmaynotbeincludedine-booksorinprint-on-demand.Ifthisbookrefersto mediasuchasaCDorDVDthatisnotincludedintheversionyoupurchased,youmaydownloadthismaterialat http://booksupport.wiley.com.FormoreinformationaboutWileyproducts,visitwww.wiley.com. Designationsusedbycompaniestodistinguishtheirproductsareoftenclaimedastrademarks.Allbrandnamesand productnamesusedinthisbookaretradenames,servicemarks,trademarksorregisteredtrademarksoftheir respectiveowners.Thepublisherisnotassociatedwithanyproductorvendormentionedinthisbook. LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheirbesteffortsinpreparing thisbook,theymakenorepresentationsorwarrantieswithrespecttotheaccuracyorcompletenessofthecontentsof thisbookandspecificallydisclaimanyimpliedwarrantiesofmerchantabilityorfitnessforaparticularpurpose.Itis soldontheunderstandingthatthepublisherisnotengagedinrenderingprofessionalservicesandneitherthe publishernortheauthorshallbeliablefordamagesarisingherefrom.Ifprofessionaladviceorotherexpert assistanceisrequired,theservicesofacompetentprofessionalshouldbesought. LibraryofCongressCataloging-in-PublicationData Weaver,Lisa,1971– ManagingthetransitiontoIFRS-basedfinancialreporting:apracticalguidetoplanningandimplementinga transitiontoIFRSornationalGAAPwhichisbasedon,orconvergedwith,IFRS/LisaWeaver. pagescm Includesbibliographicalreferencesandindex. ISBN978-1-118-64374-7(paperback)–ISBN978-1-118-64418-8(ebk)–ISBN978-1-118-64412-6(ebk) 1.Accounting–Standards. 2.Corporationreports. 3.Financialstatements–Standards. I.Title. HF5626.W432014 657′.3–dc23 2014007143 AcataloguerecordforthisbookisavailablefromtheBritishLibrary. ISBN978-1-118-64374-7(paperback)ISBN978-1-118-64418-8(ebk) ISBN978-1-118-64412-6(ebk);978-1-118-64379-2(ebk);978-1-118-92483-9(ebk) Coverdesign/image:Wiley Setin10/11ptTimesbyAptaraInc.,NewDelhi,India PrintedinGreatBritainbyTJInternationalLtd,Padstow,Cornwall,UK CONTENTS Page Chapter Title No. ListofTables vii ListofFigures ix ListofCaseStudies xi Foreword xiii Preface xv Disclaimer xvii Acknowledgements xix AbouttheAuthor xxi Introduction xxiii I:UnderstandingtheFrameworkofPerformingaTransitionto IFRS-basedFinancialReporting ............................. 1 1 InternationalFinancialReportinginContext ....................... 3 2 TheConceptualFrameworkofIFRS,AccountingPoliciesandthe PresentationofFinancialStatements ............................ 25 3 IFRS1First-timeAdoptionofIFRS .............................. 43 II:PlanningandImplementingaTransitionProject ............ 67 4 EstablishingtheIFRSTransitionProject .......................... 69 5 AssessingtheAccountingImpactsofIFRSTransition .............. 105 6 WiderTransitionalIssues–Systems,InternalAuditandtheAudit Committee,andCommercialImplications ....................... 129 7 Training,CommunicationandChangeManagement ................ 163 III:TheWayForward–DevelopmentsinSelectedCountries .... 187 8 TheTransitiontoNewUKGAAP ................................ 189 9 TheWayForward–TheMoveTowardsIFRSintheUSandSelected OtherCountries .............................................. 207 Appendix1:IASBStandards ..................................... 223 Appendix2:UsefulReferenceMaterialandFurtherReading ........ 225 Appendix3:SummaryofIFRSTransitionPlanningConsiderations .. 229 Bibliography ................................................... 231 Index 237 LIST OF TABLES Table2.1 ChaptersoftheFramework 27 Table2.2 XYZGroup:StatementofFinancialPositionasat31December20X4 33 Table2.3 XYZGroup:StatementofProfitorLossandOtherComprehensive IncomefortheYearEnded31December20X4 37 Table2.4 XYZGroup:StatementofProfitorLossfortheYearEnded31December 20X4 38 Table2.5 XYZGroup:StatementofProfitorLossandOtherComprehensive IncomefortheYearEnded31December20X4 38 Table2.6 GeneralConceptsofIAS1 42 Table3.1 ExamplesofChangesinAccountingPoliciesThatMaybeRequiredon TransitiontoIFRS 48 Table3.2 MandatoryExceptionsandOptionalExemptions 52 Table4.1 TopTipsforPlanninganIFRSTransitionProject 76 Table4.2 RisksandBenefitsofIFRSTransition 77 Table4.3 TypicalIFRSReportingOptionsinaGroup 84 Table4.4 SpecificPlanningMatterstobeConsidered 87 Table4.5 AreasofInvolvementofExternalAdvisors 92 Table4.6 AnIllustrationoftheCostsofTransitionforaSelectionofCompanies 97 Table4.7 TypicalCostsofTransitionbyTypeofCost 98 Table4.8 AnOverviewIFRSTransitionActionPlanforXYZCo 100 Table4.9 IFRSTransitionDetailedActionPlanforXYZCo 101 Table5.1 ExamplesofDocumentationtobeEvaluatedWhenPerformingan AccountingImpactAnalysis 108 Table5.2 ExampleHigh-levelAccountingImpactAnalysis 111 Table5.3 AnExampleofaSpecificAccountingImpactAssessmentonNon-current Assets 112 Table5.4 IFRSsIncludingAccountingChoices 124 Table5.5 CurrentStatusofIFRSWorkPlanFocusingonMajorIFRS ActiveProjects 126 Table6.1 AnExampleoftheITConsequencesofChangestotheAccounting TreatmentofNon-currentAssets 136 Table6.2 ExamplesofOperational,FinancialReportingandComplianceRisks 139 Table6.3 ThePotentialBusinessandCommercialImplicationsoftheTransition 155 Table7.1 TrainingMethodsandtheirAdvantagesandDisadvantages 166 Table7.2 KeyCommunicationMessages 170 Table7.3 ImpactofIFRSAdoptiononRatiosandKeyPerformanceIndicators 173 Table7.4 AnExampleoftheTimingandDetailofIFRSCommunications 182 Table8.1 AccountingandWiderImpactsofMovingtoFRS102 198 Table9.1 MainDifferencesBetweenIFRSandUSGAAP 212
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