Managing the Transition to IFRS-Based Financial Reporting: A Practical Guide to Planning and Implementing a Transition to IFRS or National GAAP

FOREWORD

When the IASB came into existence, only a handful of countries used International Accounting Standards (IASs). The 2002 announcement by the European Commission that the new International Financial Reporting Standards (IFRSs), which incorporated the inherited IASs, should be used in the consolidated accounts of listed European companies and the Australian decision a month later to adopt the standards gave the world, for the first time, a standard setter with global reach. Within the next few years major economies such as Brazil, South Korea and Canada switched to IFRSs, while Japan allowed the standards to be used by domestic listed companies. Now over 120 countries, including two thirds of the G20 economies, require or permit the use of IFRSs.

For many countries, especially for those where financial reporting was influenced by taxation considerations or where companies sought bank loans rather than equity finance, the change was dramatic. A new objective of transparency and a fair presentation of profit or loss and financial position replaced tax minimisation or competitive secrecy as the goals of financial reporting. For companies in other countries used to reporting to equity investors, change was still substantial. Some accounting policies that had been used for decades were now banned. Other policies, while continued, had different nuances. The transition to IFRS for all companies involved careful study both of the new standards and of the transitional reliefs ...