1. Steve Rabin MBA CPA CVA CFF CITP
An overview of IFRS
Steve Rabin MBA CPA CVA CFF CITP
(408)

2. (c) Copyright 2011 Steve Rabin CPA
This document and any attachments are intended to provide generalized tax and valuation information that is only appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. These contents should not be acted upon without specific professional guidance. Our liability, under any circumstances, is limited to the amount paid for our services. If you are not the intended recipient please delete all copies and notify the sender. Please contact us if you have questions.
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3. (c) Copyright 2011 Steve Rabin CPA
Contents
History, Structure, Authorities
Reasons to switch to IFRS
SME rules and IFRS vs. GAAP
Conversion plan outline
Auditor issues
(c) Copyright 2011 Steve Rabin CPA

4. (c) Copyright 2011 Steve Rabin CPA
History of IFRS
1973 IASC Started
2000 IOSCO accepts IASC core standards
2002 EU requires IAS for pub co’s by 05
2003 IAS changed to IFRS
2005 EU, Australia, Hong Kong and S. Africa all require IFRS
2005+ SEC contemplates convergence around 2016 (1)
(c) Copyright 2011 Steve Rabin CPA

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2007 USA SEC allows IFRS w/o reconciliation
2008 AICPA amends Rules 202 &203 allowing IASB (London) IFRS for private companies
2009 new FASB Accounting Standards Codification (ASC) simplifies eventual convergence
USA Colleges integrate IFRS
2011 IFRS content added to CPA exam
2011 ~90 countries have conformed with IASB IFRS.
2011 ~120 countries permit or require IFRS (2)
2011 Over 40% of Fortune use IFRS (3)
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6. Who sets IFRS Standards?
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Authorities under GAAP vs IFRS for public AND ALMOST ALWAYS ALSO FOR PRIVATE co's!
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8. Reasons to convert to IFRS now
Principles based = more flexibility
Simpler standards
<500 page standards for SMEs
Avoid issuing financial statements (f/s) under both GAAP and IFRS
IFRS required by regulators/customers
Head start for possible mandatory adoption in USA
(c) Copyright 2011 Steve Rabin CPA

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Reasons to wait
Loan covenants, clients or regulators require GAAP f/s
More judgment required under IFRS
Often more footnotes under IFRS
GAAP precedents reduce benefits of principles based acctg.
Lack of training and trained staff
(c) Copyright 2011 Steve Rabin CPA

10. (c) Copyright 2011 Steve Rabin CPA
More reasons to wait
IFRS still in transition
Cost of conversion (.13% revenue (6); "400% cost of SOX" (7))
Conversion of 2 prior years required
IT systems impact
Tax impact (esp. LIFO conformity)
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11. Private Entity (“SME”) rules
SME classification is based on "nature" of organization not size Must be private company with no "public accountability"
SME rules are a smaller, simpler, standard, under 500 pages total
Changes at most every 3 years
(c) Copyright 2011 Steve Rabin CPA

12. Private Entity (“SME”) rules
SME classification is based on "nature" of organization not size Must be private company with no "public accountability"
SME rules are a smaller, simpler, standard, under 500 pages total
Changes at most every 3 years
(c) Copyright 2011 Steve Rabin CPA

13. Differences, GAAP vs. IFRS
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14. Differences, GAAP vs. IFRS
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15. Differences, GAAP vs. IFRS
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16. Differences, GAAP vs. IFRS
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17. Differences, GAAP vs. IFRS
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18. Conversion plan outline (6)
Obtain management and audit committee approval and support
Review IFRS 1, First-time Adoption of IFRS.
Identify key individuals.
Add staff if needed (1-7 individuals at large companies)
Update Accounting Policies and Procedures (APP)
IFRS Training
IT changes
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19. Conversion plan outline cont.
Derecognize unallowed items; e.g. deferred revenues, deferred sales leaseback gains
Recognize new assets and liabilities
Reclassify assets liabilities, equity (financial instruments, investments, DTA/DTL)
Remeasure (AROs, impairments, DTAs, SBC)
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20. Conversion plan outline cont.
Footnotes - Reconciliations of IFRS numbers to US GAAP
Explanation of adjustments, including impairments
Disclose new policies
New disclosures under IFRS
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21. Possible IFRS auditor issues
If a company has previously been filing GAAP financials, auditors may require consistency with GAAP
In the absence of clear IFRS authority, auditors may require the company to follow GAAP
Some auditors still lack familiarity with IFRS
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22. General auditor issues
Who delegates to whom?
Auditor staff turnover; lack of experienced seniors
Auditor possibly unwilling to exercise professional judgment, especially as to materiality
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23. (c) Copyright 2011 Steve Rabin CPA
References
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24. Conclusion/Questions?
History, Structure, Authorities
Reasons to switch to IFRS
SME rules and IFRS vs. GAAP
Conversion plan outline
Auditor issues
(c) Copyright 2011 Steve Rabin CPA