IFRS is NOW

Yes, I know… under the proposed roadmap, the switch to IFRS won’t occur until 2014.  Ignoring early adoption, which can occur as early as 2010, why do I feel it is an urgent issue now? 

First, because of the requirement of three years of comparative financial data.  If you were thinking you had almost six years to get a handle on the new rules and consider any system changes needed, well, guess what?  You really have about 2.5 years.  Companies will need to collect the appropriate information to compile IFRS basis statements starting in 2012.  This may mean keeping dual books in 2012 and 2013.

Companies who may be eligible for early adoption really should have already begun to draw up a transition plan and explore any tax risks or planning opportunities that may arise due to the switch.

Second, since most other countries are significantly ahead of the US in adopting IFRS, companies should already be looking at their international operations to consider planning opportunities.  Since many countries base their tax computations, in whole or in part, on financial statement numbers, the switch to IFRS will impact a myriad of tax computations.  Your international tax teams should be proactively looking at the changes wrought by IFRS in each country where business is taking place to analyze the impact on E&P calculations, explore any new opportunities for tax deferrals, and take advantage of opportunities to minimize cash taxes, maximize foreign tax credits, optimize repatriation strategies, and adjust transfer pricing methodologies.  These types of issues will need to be examined in each country adapting IFRS. 

So really, there's no time to waste in training our staff on IFRS.  The time to plan is now.