Regarding: USA adopting IFRS-based financial reporting
JOHAN WALLEN, CPA
PROFESSIONAL SERVICES
Mailing Address:
San Diego, CA 92112-6366
(619) 295-4624
wallencpa@wallencpa.com
Although the adoption of the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), was started as an international effort, its reporting effectiveness and logical flexibility quickly elevated IFRS to be the preferred reporting tool also for USA domestic organizations. The Financial Accounting Standards Board (FASB), in its sanctioning of Generally Accepted Accounting Principles (GAAP), did repeatedly reveal a shifty attitude (in, e.g., its various mark-to-market positions and revenue-recognition issues), which gradually moved the scale away from the FASB in favor of the IASB.
In November 2008 the SEC released its proposed roadmap for the full adoption of IFRS in the USA, and the exact date of the mandatory implementation will be decided in 2011. The move to IFRS is now inevitable, and, indicatively, the necessary transition from the old GAAP to the more desirable IFRS will require:
Analysis of authoritative standards and interpretive guidance
Accounting and reporting system revisions
Balance-sheet adjustments and one-time journal-entries
Education and training of staff, management, and board
Consistency with taxation-reporting and tax-strategies
Impact on financial-reporting metrics, benchmarks, and ratios
Harmonization of policies-and-procedures, processes, and manuals.
There are several preparatory steps that can be gradually undertaken in order to avoid future bottle-necks and excessive conversion-costs in conjunction with the imperative mandate of adopting IFRS, either in its full version (Full IFRS) or in its simplified version for Small and Medium-sized Entities (IFRS for SMEs) as issued by the IASB.
Also the Governing Council of the American Institute of Certified Public Accountants (AICPA) already voted in May of 2008 in favor of recognizing the IASB as an authoritative accounting body for purposes of establishing valid and fundamental financial accounting and reporting principles.
IFRS-based financial statements of Small and Medium-sized Entities (SMEs) are more focused on short-term cash-flow, liquidity, balance-sheet-strength, interest-coverage, and solvency-issues. The full implementation of IFRS for SMEs will provide all small USA entities with the opportunity of using a much simplified IFRS-based accounting framework to prepare their financial statements.
Among the first steps for adopting IFRS is the selection of IFRS accounting policy alternatives such as voluntary exemptions provided by IFRS-1, “First-time Adoption of IFRS”, which assists management in assessing the implications of selecting such alternatives.
Your transition from the obsolete FASB recommendations to the simplified framework provided by the IASB will require commitment, focus, and resources, it will have implication of routines, people, and tax, and it will be complex, time-consuming, and perhaps even costly if not handled in a timely fashion. I provide hands-on recurring auditing, accounting, reporting, and consulting services on a part-time basis in your offices as an independent contractor at $200 per hour, all included.
My approach guarantees an independent view of your activities, and I can handle special projects during special times. Also for training, staff seminars, and board presentations, at your convenience please contact me at (619) 295-4624 or at johan@wallencpa.com for a free meeting in your offices.
Thank you for your interest,
Johan
619/295-4624
johan@wallencpa.com
Johan Wallen
Certified Public Accountant
CPA “A” License #74226 issued by the State of California Board of Accountancy
My areas of expertise also include:
Accounting Manager/Controller/CFO for hire (temporary, part-time, vacation fill-in, parental-leave fill-in)
Certified audits, reviews, compilations, monthly reporting, special projects and investigations
Seamless transition from FASB reports to IASB future mandatory standards (Full-IFRS or IFRS-for-SMEs)
Internal control, reconciliations, payables and cash management, receivables and collections, inventory management
Budgets, business plans, financing, “what-if” forecasts, cash-flow projections, special research and reports
Cost control, job costing, cost accounting, variance analysis (actual versus budget), costing and pricing
Standard accounting software set-up, initialization, conversion, implementation, training and follow-up
Turnaround and restructuring measures, one-on-one counseling, training, staff seminars, board presentations.
Thank you again for your interest.
