IFRS update October 2005 - Introduction

Ever since we began discussing in detail the new accounting rules in early
2003, various pieces of research (including AccountancyAge’s own) have
suggested that UK listed companies would not be adequately prepared in terms of
groundwork, resource or expertise for the biggest financial switch they would
have to make in decades.

Link:
Access IFRS –
PwC’s IFRS resource centre

Fortunately, the two years of panic-ridden build up to the introduction of
international financial reporting standards nine months ago seems to have borne
fruit. Cynics would have called it scaremongering, realists would say that only
by acknowledging a worst-case scenario would (smaller) corporates fully engage.

Of course, there’s more to it than that. Ever since 1 January 2005, the
non-execs, finance directors and other board members affected by IFRS have
reacted more positively and transparently than many could ever have predicted.

As Peter Wyman, head of regulatory policy at PricewaterhouseCoopers says,

the transition was always going to be a ‘difficult one’ with a huge amount of
points to be considered and eventually ticked off, some standards still being
under review as well as the massive effort needed to plan for such a switch.

But, as so many of the commentators in our third IFRS management briefing of
2005 suggest, the changeover has, in the main, been approached with the right
mindset, advice and careful planning.

‘In 2004 and even at the beginning of the year, the ICAEW and other
organisations were running surveys about how companies were slow in taking up
and preparing for the full impact of IFRS’, says Wyman.

‘But things have now moved on, companies have just got on with it and now the
preparation has been done the large majority have avoided any last-minute
panic.’
But as we are only three-quarters of the way through the first year of
implementation, and with the results of restated IFRS interims only just
creeping through, many believe it is still too difficult to judge the specific
impact of the changes.

‘It is too early to say how easy investors have found IFRS accounts to
interpret and it will be next spring at the earliest before a clearer picture
emerges,’ says Wyman.
But the advice from the profession is that a lack of proven IFRS-driven results
should not prevent companies from continuing to strive for high standards.

Between now and the early part of next year companies should persist with
their preparations, maintain the highest standards of reporting and educate from
the top down. If continual education is the watchword, then this briefing will
help you to continue to push the right buttons.

From the impact the new rules are having on interim results and the changing
role of non-executive directors to a who’s who of IFRS regulators you will be
able to read about the issues and opinions that should be on everybody’s IFRS
radar.

And if you are not ready, we have emergency steps you should be taking right
now to ensure that you are following the right path to IFRS success.

Even though we are still in the early stages of convergence and annual
reports under IFRS are still six months away, UK plc can be proud that it has
approached IFRS in a prepared and positive manner. Let us hope that the next
phase will be as positive as the last.