With over 100 countries now requiring or permitting IFRS reporting, some of which include Hong Kong, Malaysia, Australia, India, Pakistan, Turkey, Singapore, Russia, South Africa, the European Union and the Cooperation Council for the Arab States of the Gulf – there is little doubt we’re officially headed towards a global accounting system.

In Canada the Canadian Accounting Standards Board (AcSB) has confirmed that IFRS will replace the Canadian GAAP (Generally Accepted Accounting Principles), on January 1st, 2011, for publicly accountable profit-oriented enterprises.

In the U.S. companies making the change must run the GAAP and IFRS reporting in parallel for fiscal years 2012 and 2013, in preparation for 2014 when IFRS rules will become effective.

What Is IFRS?
IFRS is a single set of global accounting standards, developed by the IASB as a means to guarantee comparable financial statement preparation and disclosure throughout the world.

Why do we need global accounting standards?
With so many businesses throughout the world, both small and large doing business internationally – there was a need for a single, world-wide system of high-quality standards to improve transparency and support between investors and partnering organizations. It effectively allows international companies to speak the same financial language.

What challenges will this change pose?
Converting to IFRS will present a number of challenges for companies. You should have the responsible parties (CFO, Controller, etc.) within your organization begin to learn about the new standards and work with external accountants to help you in the process. It is vital that the learning and training process begin immediately to ensure you are ready when the time comes. Some specific items you’ll want to cover include:

• Researching technical accounting issues
• Learning the differences between IFRS and GAAP
• Ensuring your software is capable of handling the change

Why should small and mid-sized companies care about IFRS?
Though IFRS standards tend to apply more to publicly accountable organizations – or those listed on stock exchanges, it doesn’t stop there. Some say that GAAP guidelines will eventually disappear requiring all businesses to report under the new IFRS standards.

IFRS and Accpac
If you currently use Accpac – you are in luck. Sage Accpac already has the necessary features and functionality to support a transition to IFRS.

For example, Sage Accpac…

• Is familiar with IFRS reporting as they already has over 13,000 clients in IFRS jurisdictions.
• Currently allows users to choose from a wide range of configuration options to ensure their transactions are processed and their accounts are kept in compliance with whatever local rules they happen to operate under.
• Allows users to revalue monetary assets to comply with IFRS rules.
• Has seven IFRS-compliant inventory costing methods, and a full range of IFRS-compliant project accounting methods to choose from.

For more information on this topic click here.