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Prepare Now For Best Results

January 31, 2009

Super Bowl XLIII will be played this Sunday. Preparations for the parties, the cooking, the shared meals and the big game are being made. We will enjoy the game (even the commercials) as it seamlessly entertains us for several hours. Consider for a moment the preparation that goes into the Super Bowl game. The Tampa area has been preparing for several years. Security, traffic patterns, road and infrastructure improvements, hotels, restaurants, area businesses, stadium, television, radio. They all began making preparation with appropriate lead time to get everything done before the Super Bowl is played. Their advanced preparation makes a successful Super Bowl possible.

 

Will your transition to IFRS be made a seamlessly as the Super Bowl is played? If so, you need to plan, prepare, execute all with appropriate lead times to allow completion of transition activities. There are many preparations to be made in every area that is impacted.

 

1) Accounting & Finance

a) Valuations of assets/liabilities

b) Accounting calculations

c) Supporting documentation

d) Policies and procedures

e) Financial Statements

f)  Footnotes

g) Regulatory requirements

2) Internal Audit & Controls

a) Scoping methodologies

b) Internal controls for new procedures

c) Control documentation

d) Testing approaches

e) Professional standards utilized (use US standards or international standards)

3) Information Technology

a) Accounts  & chart of account organization

b) IT controls for IFRS data conversions

c) Controls around new applications

d) Data privacy controls

4) Tax

a) Review of current processes for gathering tax data

b) Uncertain tax position processes (since these will change)

c) Change in the starting point for all tax positions (IFRS financials vs US GAAP financials

d) Changes related to FAS 109, FIN 48, FAS 123R

5) Treasury

a) Debt covenants

b) Hedging agreements

c) Agreements requiring financial statements

6) Planning and Budgeting

a) Strategic plans and initiatives

b) New approach to budgeting and planning

c) Inclusion in accounting and finance planning

d) Research and analysis of competitors

7) Investor Relations

a) Planning and timing of external communications

b) Communicating the financial impact with shareholders, analysts and the public

8) Human Resources

a) Training

b) Development of talent

c) Management of contractors & consultants needs to assist with the transition

 

With so many areas being impacted in some way, wouldn’t it be nice to smoothly transition over an appropriate lead time? What is the appropriate lead time – three years? –five years? Consider this question carefully. If your company must prepare to present three years of financial data publically effective December 31, 2014, when do you need to begin preparing?

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