Deloitte Haskins & Sells

IFRS in India
ASSOCHAM Master Class On IFRS

Hyderabad , June 25, 2010

Deloitte Haskins & Sells, Mumbai

Agenda
Global Convergence of Accounting Standards IFRS Standards Convergence of Indian Accounting Standards with IFRS IFRS Resources IFRS Vs Indian GAAP major items (separate presentation).
2

GLOBAL CONVERGENCE
of ACCOUNTING STANDARDS

Convergence Drivers
Capital Markets Regulatory requirements Internal controls Performance evaluation
4

IFRS Objective
Principles based high quality global standards Emphasis on relevance and disclosures

IFRS Adoption
Approximately 100 countries have adopted or are in the process of adoption Status of adoption by some countries which compete with India for capital allocation:
China Similar to IFRS (effective for listed entities 2007) 2010 Currently applicable for banks. 2011 2014/15/16 2005 2011 (as per action
plan released)
6

Brazil Russia

South Korea USA UK Nepal

Use of IFRSs in Europe

Europe moved to IFRSs from 1/1/2005 with about 8000 EU listed companies mandated Non-EU listed companies allowed to use GAAPs of US, Japan, China, S Korea, and India, other countries to use IFRS Review in 2011 EU member states may require IFRSs for nonlisted companies and to separate company statements European Commission has so far endorsed all IASs, IFRSs and all interpretations (except some recent
amendments)

Use of IFRSs in Canada

Currently Canadian companies listed in US may use US GAAP for domestic reporting and foreign issuers are allowed to use IFRSs From 1 January 2011, all Canadian public entities must use IFRSs Early adoption is permitted on case-bycase basis by securities regulator Not-for-profit and pension plans are not required to transition to IFRSs

IFRS Adoption
BIGGEST STAMP OF APPROVAL Securities and Exchange Commission (SEC), United States of America have permitted Foreign Private Issuers to file IFRS compliant financial statements (as promulgated by the IASB) without reconciliation to US GAAP

SEC has issued a proposed roadmap to assess whether US domestic registrants should be permitted to use IFRS
9

SEC permits IFRS filings

SEC now permits foreign private issuers to file their financial statements prepared under IFRS in stead of US GAAP without the need for reconciliation In November 2008, SEC revised its roadmap to include milestones that could lead to mandatory transition to IFRSs starting fiscal years ending on or after 15 December 2014/15/16, with permission to certain entities to adopt early.

SEC permits IFRS filings

SEC has issued a roadmap proposing the use of IFRS by Large Accelerated filers for fiscal year ending on or after Dec 15, 2014. Accelerated filers for fiscal year ending on or after Dec 15, 2015 Non-accelerated filers for fiscal year ending on or after Dec 15, 2016 IASB FASB integration project

The Global Move Towards IFRS

Canada 2009/11 Europe 2005 United States (2014/15/16?) China 2007 Japan (2016)

India 2011 Brazil 2010 Chile 2009 South Africa 2005 Australia 2005

Current or anticipated requirement or option to use IFRS (or equivalent)

Convergence Project in India

In October 2007, ICAI issued concept paper giving the approach and roadmap for convergence Various study groups have been formed The convergence exercise will be taken up in phases - listed and bigger companies initially, smaller public companies thereafter, and eventually all private companies/SMEs

Convergence Project in India

The ministry of Company affairs has appointed two working groups, headed by Mr. Y.H. Malegam and Mr. Mohandas Pai to finalise the roadmap to IFRS convergence. SEBI Committee on Disclosures and Accounting Standards (SCODA) is the standing Committee - Voluntary adoption of International Financial Reporting Standards (IFRS) by listed entities having overseas subsidiaries or by all listed entities.

IFRS in India
On April 5, 2010 Amendment to listing Agreement provides the option of adoption of International Financial Reporting Standards (IFRS) by listed entities having subsidiaries while declaring Consolidated results/financial statements Standalone results will be as per the existing Indian GAAP

IFRS in India
On January 22, 2010 MCA has released Road Map for convergence with IFRS For large Companies

IFRS in India Phase I

The following categories of companies will convert their opening balance sheets as at 1st April, 2011, if the financial year commences on or after 1st April, 2011 in compliance with the notified accounting standards which are convergent with IFRS. These companies are:a. Companies which are part of NSE Nifty 50 b. Companies which are part of BSE - Sensex 30 c. Companies whose shares or other securities are listed on stock exchanges outside India d. Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores.

IFRS in India Phase II

The companies, whether listed or not, having a net worth exceeding Rs. 500 crores but not exceeding Rs. 1,000 crores will convert their opening balance sheet as at 1st April, 2013, if the financial year commences on or after 1st April, 2013 in compliance with the notified accounting standards which are convergent with IFRS.

IFRS in India Phase III

Listed companies which have a net worth of Rs. 500 crores or less will convert their opening balance sheet as at 1st April, 2014, if the financial year commences on or after 1st April, 2014, whichever is later, in compliance with the notified accounting standards which are convergent with IFRS.

IFRS in India Road map

When the accounting year ends on a date other than 31st March, the conversion of the opening Balance Sheet will be made in relation to the first Balance Sheet which is made on a date after 31st March.

IFRS in India Road map

Companies which fall in the following categories will not be required to follow the notified accounting standards which are converged with the IFRS (though they may voluntarily opt to do so) but need to follow only the notified accounting standards which are not converged with the IFRS. These companies are: (a) Non-listed companies which have a net worth of Rs. 500 crores or less and whose shares or other securities are not listed on Stock Exchanges outside India. (b) Small and Medium Companies (SMCs).

IFRS in India Road map

The draft of the Companies (Amendment) Bill, proposing for changes to the Companies Act, 1956 will be prepared incorporating the recommendation of Sub-Group 1 Report.

IFRS in India Road map

Revised Schedule VI to the Companies Act, 1956 according to the converged Accounting Standards has been submitted by the ICAI to NACAS which, after review, will submit to the Ministry. Amendments to Schedule XIV will also be made in a time bound manner.

IFRS in India Road map

In respect of the converged Accounting Standards, the Chairman of the Accounting Standards Board of ICAI will submit the converged version of Accounting Standards to NACAS from time to time for recommendations and onward submission to Ministry. However, convergence of all the accounting standards will be completed by ICAI and NACAS will submit its recommendations to the Ministry.

IFRS in India Road map

Roadmap recommended by Core Group of MCA in respect of insurance companies, banking companies and non-banking finance companies. Insurance companies: All insurance companies will convert their opening balance sheet as at 1stApril, 2012 in compliance with the converged Indian Accounting Standards.

IFRS in India Road map

Banking companies:(a) All scheduled commercial banks and those urban co-operative banks(UCBs) which have a net worth in excess of Rs. 300 crores will convert theiropening balance sheet as at 1st April, 2013 in compliance with the first set ofAccounting Standards (i.e. the converged Indian Accounting Standards).

IFRS in India Road map

Banking companies:(b) Urban co-operative banks which have a net worth in excess of Rs. 200crores but not exceeding Rs. 300 crores will convert their opening balance sheets as at 1st April, 2014 in compliance with the first set of Accounting Standards (i.e. the converged Indian Accounting Standards).

IFRS in India Road map

Banking companies:(c) Urban co-operative banks which have a net worth not exceeding Rs. 200crores and Regional Rural banks (RRBs) will not be required to apply the first set of Accounting Standards i.e. the converged Indian Accounting Standards(though they may voluntarily opt to do so) and need to follow only the existing notified Indian Accounting Standards which are not converged with IFRSs.

IFRS in India Road map

NON-BANKING FINANCE COMPANIES
Type of institution Opening B/s conversion date April 1, 2013

Companieswhich are part of NSE Nifty 50Companies & which are part of BSE - Sensex 30 Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores. All listed NBFCs and unlisted NBFCs which do not fall in the above categories and which have a net worth in excess of Rs. 500 crores

April 1, 2014

IFRS in India Road map

NON-BANKING FINANCE COMPANIES

Unlisted NBFCs which have a net worth of Rs. 500 crores or less will not be required to apply the converged Indian Accounting Standards.

Clarification issued MCA on the certain issues in the Roadmap

31

MCA Clarifications
The Ministry of Corporate Affairs issued clarification on the following issues in the IFRS Roadmap on 4th May 2010:
Determination of Applicability

Applicability for entities that are subsidiaries, joint ventures or associates of companies covered under the convergence roadmap.
Discontinuing use of the first set of Accounting Standards (Converged Accounting Standards) Calculation of net worth

Removal of options

32

MCA clarifies on: Determination of Applicability

Whether companies can voluntarily opt to provide comparative figures for 2010-11 in accordance with the converged Accounting Standards?

33

MCA clarifies on: Determination of Applicability

Previous year figures - Clarification: Companies should show previous years figures as per the F/s for 2010-11. Option available to add an additional column to indicate what the figures could have been if the Converged Accounting Standards had been applied in the previous year Companies which make this additional disclosure, for this purpose, convert their opening balance sheet as the date on which this pervious year commences and in that case, a further conversion of the opening balance sheet for the year for which the F/s are prepared will not be necessary.
34

MCA clarifies on: Determination of Applicability Whether companies covered in 2nd / 3rd phase for application of the converged Accounting Standards can voluntarily opt to apply the same w.e.f accounting year beginning 1st April 2011?

35

MCA clarifies on: Determination of Applicability

Clarification:
Companies in the 2nd / 3rd phase will have an option for application of the Converged Accounting Standards only for the financial year commencing on 1st April 2011 or thereafter

36

MCA clarifies on: Determination of Applicability

What is the cut-off date on which the criterion set out in the roadmap shall be applied in order to determine the companies falling in each of the four categories which will convert their opening balance sheet as at 1st April 2011 in compliance with the converged accounting standards
37

MCA clarifies on: Determination of Applicability

Clarification:
The date of determination of the criteria is the Balance Sheet as at 31st March 2009; OR the first Balance Sheet prepared thereafter when the accounting year ends on another date.
38

MCA clarifies on: Determination of Applicability

What is the cut-off date on which the criterion set out in the roadmap shall be applied in order to determine the scheduled commercial banks/urban co-operative banks/NBFCs falling in each of the categories (as set out in the roadmap for Banks and NBFCs) which will convert their opening balance sheet as at 1st April 2013 in compliance with the converged Accounting Standards?
39

MCA clarifies on: Determination of Applicability

Clarification:
The date of determination of the criteria is the Balance Sheet as at 31st March 2011; OR the first Balance Sheet prepared thereafter when the accounting year ends on another date.

40

MCA clarifies on: Status of subsidiaries, JVs and Associates of entities who are covered under roadmap
Whether it would be permissible for the companies which are not individually covered under the phasing plan for application of the Converged Accounting Standards to voluntarily opt for application of the Converged standards even for their standalone F/s?

41

MCA clarifies on: Status of subsidiaries, JVs and Associates of entities who are covered under roadmap
Clarification:
Criteria to be considered for each companys standalone accounts Companies covered in a particular phase having subsidiaries, JVs or associates not covered in those phases will prepare consolidate F/s according to Converged Accounting Standards One of more companies in a group will continue to prepare F/s in accordance with the Accounting Standards applicable to the particular phase to which it belongs but parent will need to make amendments to these accounts in order to consolidate as per Converged Accounting Standards Such subsidiaries, JVs or associates may have the option to 42 early adopt the Converged Accounting Standards.

MCA clarifies on: Discontinuing use of Converged Accounting Standards

Does a company have the option to go back to preparing F/s in accordance existing Indian Accounting Standards if it no longer satisfies the specified criteria in the future?

Clarification:
No. Once a company starts following the Converged Accounting Standards on the basis of the eligibility criteria, it will be required to follow such Accounting Standards for all the subsequent financial statements even if any of the eligibility criteria does not subsequently apply to it. 43

MCA clarifies on: Calculation of Net worth

Rules for calculation of qualifying net worth Clarification:
Networth will be calculated as per audited balance sheet of the company as at 31st March 2009 or first balance sheet for accounting periods which ends after that date Networth = Share Capital + Reserves Revaluation Reserves Miscellaneous Expenditure Debit Balance in Profit and Loss A/c For companies which are not in existence on 31st March 2009, networth will be calculated on the basis of the first balance sheet ending after that date.
44

MCA clarifies on: Calculation of Networth

Rules for calculation of qualifying networth recommended to Scheduled Commercial Banks / Urban Cooperative Banks / NBFCs Clarification:
Networth will be calculated as per audited balance sheet of the Bank / NBFC as at 31st March 2011 or first balance sheet for accounting periods which ends after that date Networth = Share Capital + Reserves Revaluation Reserves Miscellaneous Expenditure Debit Balance in Profit and Loss A/c For Banks / NBFCs which are not in existence on 31st March 2009, networth will 45 calculated on the basis of be

MCA clarifies on: Removal of Options

Situation where Notified Converged Accounting Standards ARE NOT fully consistent with IAS / IFRS Clarification:
Companies will follow the first set of Accounting Standards i.e. the Converged Accounting Standards and NOT IFRS.

46

Regulatory updates

Steps to reduce inconsistencies between regulations

The ICAI has taken the following steps for Identification of inconsistencies between various Laws and Regulations: Constitution of a Group on Liaison with Governmental and Regulatory Authorities Group has constituted separate Core Groups to identify inconsistencies between IFRSs and the following statutes: Companies Act SEBI Regulations Banking Laws & Regulations Insurance Laws & Regulations
(Source: Announcement by the Technical Directorate, The Institute of Chartered Accountants of India )

MCA Actions
Formation of a Core Group Formation of Sub-group on Accounting and a CFO sub-group Public statements by Minister and officials indicating an increased sense of urgency

Action Steps
Changes required in legislations Accounting Standards
standards on new subjects Conceptual changes

Disclosure changes
Language changes

Training and accreditation Enabling infrastructure Regulatory oversight

Convergence Status
Exposure drafts on most of the converged standards have been released for public comments by ICAI

51

IFRS Hierarchy
International Accounting Standards Committee Foundation. The body which oversees the International Accounting Standards Board.

International Accounting Standards Board (IASB).

The body which sets International Financial Reporting Standards (IFRS) and approve interpretations International Financial Reporting Interpretations Committee (IFRIC). Responsible for interpretation of standards and issue guidance on issues that have not yet been addressed by standards. The Standards Advisory Council (SAC). Forum to provide broad strategic advice on IASBs agenda priorities and insight into costs and benefits of projects.

IFRS Hierarchy Statements

International Accounting Standards (IAS) International Financial Reporting Standards (IFRS) Standard Interpretations (SIC) International Financial Reporting Interpretations (IFRIC)

IFRS Structure
The term IFRSs currently comprises of:
9 IFRSs, 29 IASs (originally 41), 18 IFRIC and 11 SIC interpretations, plus the Framework

There are 15 new standards and major projects for which exposure drafts are issued Final SME standard was been issued in July 2009. 8 existing standards are being amended for which exposure drafts are issued

IFRS - Standards
Preface to International Financial Reporting Standards Framework for the Preparation and Presentation of Financial Statements

IFRS Standards Contd.

IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 2 Share-based Payment IFRS 3(2008) Business Combinations

IFRS Standards Contd.

IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IFRS 6 Exploration for and Evaluation of Mineral Resources IFRS 7 Financial Instruments: Disclosures

IFRS Standards Contd.

IFRS 8 Operating Segments* IFRS 9 Financial Instruments - Assets

* Annual periods beginning on or after 1 January 2009. Supersedes IAS 14 from that date, or date of earlier application.

IFRS Standards Contd.

IAS 1(2007) Presentation of Financial Statements IAS 2 Inventories IAS 7 Statement of Cash Flows IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IFRS Standards Contd.

IAS 10 Events after the Reporting Period IAS 11 Construction Contracts IAS 12 Income Taxes IAS 16 Property, Plant and Equipment

IFRS Standards Contd.

IAS 17 Leases IAS 18 Revenue IAS 19 Employee Benefits IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

IFRS Standards Contd.

IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 23 Borrowing Costs IAS 24 Related Party Disclosures IAS 26 Accounting and Reporting by Retirement Benefit Plans

IFRS Standards Contd.

IAS 27(2008) Consolidated and Separate Financial Statements IAS 28 Investments in Associates IAS 29 Financial Reporting in Hyperinflationary Economies IAS 31 Interests in Joint Ventures

IFRS Standards Contd.

IAS 32 Financial Instruments: Presentation IAS 33 Earnings per Share IAS 34 Interim Financial Reporting IAS 36 Impairment of Assets IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IFRS Standards Contd.

IAS 38 Intangible Assets IAS 39 Financial Instruments: Recognition and Measurement IAS 40 Investment Property IAS 41 Agriculture

Progress of Convergence

Current Status
Progress so far Standards Cleared by Council Exposure Drafts Issued and Comments Considered by ASB Number of Standards
12 8

Exposure Drafts Issued and Comments To Be Considered by ASB

TOTAL

18

38

Standards Cleared by Council

Standard #
AS 1

Standard Description
Corresponding to IAS 1, Presentation of Financial Statements

AS 2
AS 3 AS 4 AS 5 AS 7

Corresponding to IAS 2, Inventories

Corresponding to IAS 7, Statement of Cash Flows Corresponding to IAS 10, Events after the Reporting period Corresponding to IAS 8, Accounting Policies and Changes in Accounting Estimates and Errors Corresponding to IAS 11, Construction Contracts

AS 12
AS 16 AS 19 AS 25

Corresponding to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance
Corresponding to IAS 23, Borrowing Costs Corresponding to IAS 17, Leases Corresponding to IAS 34, Interim Financial Reporting

AS 34
AS 35

Corresponding to IAS 29, Financial Reporting in Hyperinflationary Economies

Corresponding to IFRS 6, Exploration for and Evaluation of Mineral Resources

Exposure Drafts issued and comments considered by ASB

Standard #
AS 10 AS 11 AS 18 AS 20 AS 21

Standard Description
Corresponding to IAS 16, Property, Plant and Equipment Corresponding to IAS 21, The Effects of changes in Foreign Exchange rates Corresponding to IAS 24, Related Party Disclosures Corresponding to IAS 33, Earnings Per Share Corresponding to IAS 27, Consolidation and Separate Financial Statements Corresponding to IAS 28, Investments in Associates Corresponding to IAS 37, Provisions and Contingent Liabilities and Contingent Assets Corresponding to IAS 40, Investment Property

AS 23 AS 29

AS 37

Exposure Drafts issued and comments to be considered by ASB

Standard # AS 9 AS 14 Standard Description Corresponding to IAS 18, Revenue Corresponding to IFRS 3, Business Combinations

AS 15
AS 17 AS 22 AS 24 AS 26 AS 27 AS 28

Corresponding to IAS 19, Employee Benefits

Corresponding to IFRS 8, Operating Segments Corresponding to IAS 12, Income Taxes Corresponding to IFRS 5, Non-current Assets Held for Sale and Discontinued Operations Corresponding to IAS 38, Intangible Assets Corresponding to IAS 31, Interest in Joint Ventures Corresponding to IAS 36, Impairment of Assets

Exposure Drafts issued and comments to be considered by ASB

Standard # AS 30 Standard Description Corresponding to IAS 39, Financial Instruments: Recognition and Measurement Corresponding to IAS 32, Financial Instruments: Presentation Corresponding to IFRS 7, Financial Instruments : Disclosures Corresponding to 2, Share-based payment Corresponding to IAS 26, Accounting and Reporting by Retirement Benefit Plans Corresponding to IAS 41, Agriculture Corresponding to IFRS 4, Insurance Contracts Corresponding to IFRS 9, Financial Instruments Corresponding to IFRS 1, First time Adoption of International Financial Reporting Standards

AS 31 AS 32 AS 33 AS 36 AS 38 AS 39 AS 40 AS 41

IFRS CONVERSION ISSUES

72

Business and organisational considerations IFRS impact beyond financial statements

Most aspects of the business can be affected: Processes and systems Operations Tax Treasury
The adoption of IFRS affects more than a companys accounting policies, processes, and people. Ultimately, most aspects of a companys business and operations are affected potentially.

Examples include impact on: Debt covenants Compensation plans Revenue contracts Joint ventures and alliances Investor communication

IFRS Implementation Issues

Treasury Management
Hedge Accounting Investments

Valuation
Fair valuation approach Fair valuation methodologies

Distribution
2010-11 profit will change Dividend policy

Investor relations
Changes in EPS EU experience

Debt Covenants
IAS 1 requirements

ORGANISATION
IT Systems
Disclosures (IFRS 7) Hedge accounting Data collection

Mergers & Acquisitions

Control Goodwill Capital reserve IFRS 1 option

HR
Training Revised CTC

Management Compensation MIS

Increased volatility Fluctuations outside control Fair value adjustment ESOP fair value Targets not achievable Director remuneration Investors

Tax Implication
Fair value adjustment Most item will flow through P & L

Potential business issues

Some of the key business issues that will need to be addressed for successful implementation:
Treasury management Distributions Debt covenants & financing Mergers & acquisitions Management compensation Potential tax implications Management information Human resources & training IT systems Investor relations
75

Potential business issues

Treasury management
Certain financing and hedging policies will no longer achieve the desired accounting effect, will instead create volatility in reported profits Challenge have to find good economic strategies that will produce right accounting treatment

Distributions
Equity will change current dividend policy may no longer be sustainable Altered dividend patterns may directly impact the share price
76

Potential business Issues

Debt covenants & financing
Where debt covenants do not provide for changes in accounting standards, changes to financial position may cause these covenants to be breached Impact companys ability to ensure continuity of financing arrangements When seeking to raise finance, comparative figures may need to apply IFRS as well

Mergers & acquisitions

Accounting for potential acquisitions will be altered by the adoption of IFRS Goodwill => become non-amortised Past mergers/acquisitions may contain clauses including price revisions based on accounting data

77

Potential business issues

Management compensation
Fair value of share options and other incentive plans shall be recognised Additional cost to company Any adjustment to a directors remunerations scheme is a sensitive issue Careful management of investor relations is essential

78

Potential business issues

Potential tax implications Definition of taxable profits, follow accounting rules?

Major accounting principles adopted:

Mark-to-market basis for valuation Flow through P&L accounts for most items Both unrealized gains and loss will appear in profit and loss account
Items may cause material impact:

Financial instruments Share-based payments Investment properties Income taxes Revenue recognition
79

Potential business issues

Management information
Forecasts and internal performance measurements may no longer be comparable with results reported in FS (eg fair value change) Making forecast more difficult

Human resources & training

Training will be required throughout the organization, but not just for finance dept Existing skills may not be adequate to tackle IFRS related issues need to be supplemented externally or by recruitment

80

Potential business issues

IT systems
Systems that will be affected: internal and external reporting systems, accounting systems and operating systems E.g. new accounting treatments for financial instruments may require treasury systems to be integrated with financial reporting system

81

Potential business issues

Investor relations
May challenge the changes in profits and EPS Investors will form their own expectation on new accounting policies and expect certain accounting outcomes Nobody likes surprises

82

Planning for IFRS

Technical Accounting Tax Internal Processes and Statutory Reporting Technology Infrastructure Organizational Issues Implementation strategy and timeline

83

IFRS Conversion Approach

Determine business case & future state vision for IFRS adoption Perform comprehensive IFRS conversion Enable continued IFRS reporting and perform knowledge transfer
84

IFRS Conversion Approach

An IFRS assessment and conversion utilizes a three-phase approach Phase 1 Assess
Objective Determine business case & future state vision for IFRS adoption Analyze impact of IFRS statutory and regulatory requirements Determine tax reporting & method implications of IFRS adoption Analyze impact to accounting, reporting, close consolidation, and reconciliation processes and controls Evaluate the impact upon financial systems and architecture Assess magnitude of change upon stakeholders and operating model

Phase 2
Convert
Perform comprehensive IFRS conversion Convert to IFRS at the consolidated and/or statutory reporting level Perform tax conversion Design future state accounting, reporting, close consolidation, and reconciliation processes and controls Design future state IT systems to incorporate IFRS reporting Develop change management strategy and revised operating model

Phase 3 Sustain
Enable continued IFRS reporting and perform knowledge transfer Configure, test, and deliver production environment and monitor system enhancements Execute change management activities and implement revised operating model Deploy future state accounting, reporting, close consolidation, and reconciliation processes & controls Continue monitoring and application of the changing standards environment Facilitate knowledge transfer for ongoing IFRS reporting Finalized IFRS Policies Revised processes Training Workshops Detailed Transition Plan IFRS Conversion Summary

Key Tasks

Key Technical Accounting Country Deliverables Assessment High Level Tax Impact Assessment Current State Process and Controls Assessment Current State Systems Assessment Business Case and Roadmap

IFRS Accounting Policies and Procedures IFRS Compliant Reports Future State Process Flows and Narratives Change and Risk Mitigation Plan Revised Operating Model

85

Steps
Parallel run and test systems Implement business decisions Train staff
Design and implement systems

Plan the implementation Think of business issues Scope the impact

86

IFRS Resources
IASB website http://www.iasb.org/Home.htm ICAIs website http://www.icai.org/
87

Deloitte IFRS Resources

88

www. Iasplus.com 1,200 pages and files, 350 mb of IAS stuff.

89

www.iasplus.com
Day by day past news back to December 2000 (a new page updated almost daily); Detailed summaries of all Standards and Interpretations;

E-Learning modules;
Model IFRS financial statements and disclosure checklists;

Comparisons of IFRS and various national GAAPs;

Deloitte IFRS publications; and much more
90

IFRS e-Learning

91

e-Learning IAS 40 Home page

Overview Four
scenarios

Assessment
92

IFRS in your pocket 2009

Free at

www. iasplus.com

93

Model IFRS Financial Statements for 2009

Free at

www. iasplus.com
94

THOUGHT LEADERSHIP

95

Experience Learned
Be Strategic. Accounting choices and a principles based approach provides opportunity. The business will be impacted. Taxes. Systems. Debt Covenants. Dividends. Earnings. MIS. The reach of IFRS can be widespread. Execution counts. Understanding concepts is only the beginning. Striking the numbers and documenting your position requires a very large effort. Communication is critical. Internal communication across your business is needed. External communication with all stakeholders is important. Dont forget the analysts! Disclosures require a lot of effort. Dont leave this until its too late. The information requirements are extensive.
96

Summary

Key considerations for Industries

Impact on P&L and Net worth Market valuation Global image More business True picture IFRS is much more than an accounting matter.

Questions?

Deloitte Haskins & Sells

98

Thank you

Deloitte Haskins & Sells 99