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What you Need to Know about IFRS
Central government and health bodies have now adopted IFRS and will produce their next accounts on this basis; local governments will follow suit in 2010/11. To ensure your organisation successfully transits to IFRS, CIPFA has dedicated this page to keep you abreast of the changes your organisation will encounter, why IFRS is a positive step forward and the key factors to consider during this period of transition.
Technical Changes
- Fixed assets will be measured and recorded differently, particularly as a result of revaluation bases, impairment, revaluation losses and a stronger emphasis on component accounting. Specific consideration will need to be given to the capitalisation or reclassification of software and development costs
- Outstanding holiday pay will need to be accrued
- Lease categorisation may change and leases for land and buildings will need to be separated in all cases
- Private Finance Initiatives (PFIs) assets will need to be reported in the public sector’s balance sheet based on a series of ‘control’ tests rather than ‘risk and reward’
- Presentation of financial statements, including supporting disclosure notes, will need to be changed
- The Chart of Accounts and supporting systems will need to be adapted
Benefits of IFRS
- Enables you to make better, more informed decisions through improved and consistent management information reporting
- Encourages organisations to use a common accounting language
- Gives you a chance to make strategic improvements to your finance systems and processes as well as well as help reduce costs in the longer term
- Allows for better comparability and transparency of an organisation’s information across international borders and improves and initiates new relationships with customers and partners
Have You Considered the Following….
- Do you have all the technical information necessary to ensure that you comply with the new reporting standards and understand the implications?
- Does your organisation have the capability and capacity to efficiently and effectively implement this transition?
- Will investing staff time in the effective implementation of IFRS have a negative impact on service delivery?
- Do key staff within operational and strategic units have an in-depth understanding of IFRS in order to facilitate this change?
- How will IFRS be embedded into your organisational processes?
- How will the changes be communicated to your stakeholders?
Our IFRS Support to You
See the diagram below to find out the level of support available to you to ensure you confidently adopt IFRS before the appropriate deadline. Solutions come under three categories of support: information, guidance & support and practical assistances and you can pick and choose the support which suits you or take advantage of the entire IFRS range.
