Budget 08: Government IFRS switch delayed a year

The Treasury will delay adoption of IFRS until 2009/10 following a select committee meeting last week in which it was revealed that two of the government's largest departments - the Ministry of Defence, and Health – were not ready for the switch.

KPMG public sector audit director, Greg McIntosh said the key to successful implementation of IFRS lay in preparation.

'Certainly, our experience of the introduction of IFRS into the private sector was that the companies that started the earliest fared the best.

'The extra year will be important in enabling central government to prepare thoroughly and to restate the previous year’s accounts for comparative purposes.

'It will be important, though, that momentum is not lost and that this deferral does not result in the foot being taken off the gas in the movement towards IFRS reporting. A year is not a long time in financial reporting, and there is still very little room for slippage,' he said.