Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

the ability to look at the IFRS conversion process as an opportunity for cost reductions, process improvement, organizational enhancement and the opportunity to be on the leading edge of business. Proper planning now allows companies to develop a strategic implementation plan instead of reacting too late and allowing IFRS to only become a cause of increased costs.

LIFO is not allowed under IFRS, organizations that have used LIFO for tax purposes must prepare themselves to use a new inventory method for tax purposes. Technology The technology of firms also will be affected by the new reporting standards. Since IFRS changes the way some financial data is classified, the chart of accounts must be re-mapped to ensure all financial data is in the proper area and financial statements are accurate. ERP systems must be reconfigured to reflect the new classifications. Data that is entered into the GL, the flow of data through the system, and calculations preformed by the system must all be reviewed to ensure the ERP system is capable of the appropriate modification necessary for IFRS. IT general controls must be reconfigured to address the changes that may occur in the IT environment due to changes from complying with IFRS. As noted before, the presentation of financial statements under IFRS will differ from U.S.-based GAAP. Thus, the systems used to consolidate financial statements will need to be restructured to organize financial data under IFRS. The required use of IFRS by U.S. public companies appears to be an inevitable change. Since an IFRS adoption process may be costly, many companies are likely to take the “wait and see approach” or simply resort to tracking changes and IFRS differences in off-line spreadsheets in an effort to delay costs. However, it is important to bear in mind this step will likely only be a less expensive option in the short term. In the long run, conversion to IFRS will be critical to an organization’s success in today’s global marketplace in order to obtain investors and capital and remain viable with competitors. By taking a proactive approach, organizations have

Questions? Contact: Eric Janson, CPA Partner Assurance Services Group 314.290.3295 eric.janson@rubinbrown.com Mike Ramirez, CPA Manager Internal Audit Services Group 314.290.3455 mike.ramirez@rubinbrown.com

12 u spring 2010 issue