IFRS skills in demand
Employers are still struggling to get their heads around IFRS. Over half (53%) of AIM-listed businesses in a recent survey said International Financial Reporting Standards (IFRS) compliance was a challenge for them.
Recent research from a top 10 accountancy practice revealed that the introduction of IFRS proved to be one of most worrying areas for AIM-listed businesses, with over half of respondents stating that it had been troublesome.
AIM-listed companies and public sector next in line
AIM-listed companies now have to get their houses in order and try to learn the lessons of those that have gone before them. Companies on AIM are required to comply with IFRS by April 2009 and are encouraged to adopt early. It is easy for companies to underestimate the complexity of the new requirements and the effect they will have. It is essential that finance directors understand the commercial impact of IFRS on their business and are able to communicate this in a timely, unambiguous manner to analysts and investors. It is also important that they identify the key areas and address these as soon as possible.
AIM-listed companies now have to get their houses in order and try to learn the lessons of those that have gone before them.
If government bodies and AIM-listed companies are to fully address the IFRS issue, there will certainly be an increased demand for accountants with this specialist knowledge. There is talent out there and we have worked with many of the leading specialists in the IFRS field who can bring this knowledge and expertise to ensure that deadlines for the new standards are met. We are asked to source specialist contractors who have a niche skill-set and are able to work with an organisation to help with the interpretation of new standards and transfer knowledge to permanent employees.
Following an announcement in the 2007 budget (and an amendment in 2008), government bodies will be required to adopt IFRS for their 2009/2010 accounts and will also be required to restate 2008/09 accounts using IFRS to provide comparative information.
Understanding the impact
It is likely to be a challenge for many public sector organisations and AIM-listed businesses. We have already seen UK listed companies struggle to get their heads around IFRS as the implications are complex and wide-ranging. IFRS is not limited to technical accounting issues for the finance team. The impact of the changes will expand to encompass many areas of the organisation such as the setting and measurement of performance targets, budgeting and forecasting – as well as financial reporting.
Process and systems changes are inevitable. Effective timely communication of the issues, both internally to employees and externally to stakeholders, is critical. The financial impact will vary widely from one organisation to another but in all cases the broader implications are wide-reaching.
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