PracticeAuditIAS adoption date unrealistic

IAS adoption date unrealistic

Companies will need concessions from international accounting standards because they will not be ready by the 2005 deadline, according to industry experts.

Link: The Debate: Adopting international GAAP

The problem relates to the need to provide comparison data for periods before the ‘go live’ date even though many standards have not been made available even in draft form.Ian Wright, senior partner at the global corporate reporting group at PricewaterhouseCoopers, said: ‘While 2005 may seem to be a long way off to some, having to prepare comparison accounts for the previous year effectively means having systems in place to capture the right data by 1 January 2004.

‘In fact, if the company has a US listing, two years of comparison accounts are needed, meaning the company may need to be ready by the beginning of 2003. For standards such as IAS39, this is four months before they have even been finalised and published.’

Wright added that those wishing to publicly list in 2005 have to provide three years of comparable accounts, meaning this year’s results will also be required.

The IASB has published exposure drafts for many of the standards to allow companies to get to grips with the new guidelines early but Wright believes that the final drafts will see many changes, including some possibly major ones.

‘It’s no good setting up systems now to capture certain data only to find halfway through the year that the data you need is completely different,’ he said. ‘I don’t believe putting the deadline back to 2006 will help as companies will just put back their plans for 12 months.’

No-one from the International Accounting Standards Board was available for comment.

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