Industry: Personal and Household Products
Project: IFRS Enterprise Impact Analysis
Location: San Diego
Project Goal: Determine the scope and impact of IFRS conversion on the global organization.
Organizational Challenge: Our client needed to determine the level of effort that would be required to implement IFRS on a global basis. There was particular concern around accounting policy decisions that foreign subsidiaries were making and the impact these decisions would have on options available under IFRS 1. The organization was also specifically looking for the Resources team to:
(1) Identify how and when the current roadmap and timeline would impact the company's operations
(2) Provide recommendations as to the appropriate planning and funding priorities for IFRS implementation over the next several years
(3) Recommend a longer-term operational planning and implementation roadmap, including a prioritization of IFRS projects based on a company-specific assessment of operations, resources and organizational structure, culture and constraints
How Resources Helped: Our team performed an IFRS Enterprise Impact Analysis which included scoping, approach, management and execution. The deliverables included a high level implementation plan with the company's high/medium/low risk transition impact areas and a related timeline. The team also provided management and board presentations and an Enterprise Impact Matrix tool to be utilized in the next phase of the company's IFRS transition. The consultant on this engagement had extensive industry and project management experience, and was able to quickly identify the project deliverables and how to achieve them. As a result, the consultant was able to deliver an impactful enterprise assessment that satisfied the client’s project requirements within very tight timing and budget constraints.
Results Achieved: The result was the development of an enterprise-specific document that incorporated unique and creative assessment tools which resulted in a specific and relevant IFRS conversion timetable and implementation roadmap.
Industry: Manufacturing
Project: IFRS Implementation
Location: Alberta, Canada
Summary: This Fortune 1000 company has a joint venture with a Canadian Public company. Canada required the use of IFRS beginning in 2011.
Organizational Challenge: This organization needed to be prepared to be converted to IFRS to ensure the company financials were not materially misstated due to inaccurate fixed asset inventory information. The Resources team established and performed the project goals.
How Resources Helped: The Resources team performed a full fixed asset inventory at the client locations. After the inventory was complete, Resources assisted in the determination of fixed asset write downs for unidentified assets, and determined the appropriate component of the asset along with its useful life in accordance with IFRS component depreciation requirements. In addition, the Resources team liaisoned with the company tax department to keep them abreast of decisions made that would impact tax financials.
Results Achieved: The on-site inventory was completed in two weeks. In addition, Resources prepared the write-off details and assisted the joint venture with moving the assets to the newly created IFRS categories.
Industry: Insurance
Project: IFRS Implementation
Location: Montreal, Canada
Summary: This Canadian based organization did not have anyone fully dedicated to IFRS conversion as of December 2008. With the deadline just 25 months away, they turned to Resources to guide them down the path to IFRS conversion.
Organizational Challenge: Beginning in December 2008, the Canadian division of a global insurance company determined that with the January 1, 2011 deadline for IFRS fast approaching, they needed to begin analyzing the differences between IFRS and Canadian GAAP. Initially, nobody at the Company was dedicated full-time to the conversion project and it was difficult for the members of the accounting and finance community to find time to work on it with their day-to-day responsibilities. As a Canadian insurance company, the Company is regulated by the Office of the Superintendent of Financial Institutions (OSFI), which requires all its members to be IFRS compliant by 2011. Furthermore, the scope of the challenge expanded tremendously in February 2009 when the global company divested the Canadian division to a number of institutional investors on a private placement basis. This, in conjunction with the conversion to IFRS, provided the Company with an opportunity to review their accounting policies overall.
How Resources Helped: The team was brought in to help manage the project and to assist with the analysis of converting from Canadian GAAP to IFRS. One consultant served as a project manager to:
(1) Design and execute a project plan and structure
(2) Identify major differences between GAAP and IFRS and help to assess the impact on the financial statements
(3) Ensure the client's project was progressing toward the IFRS conversion according to plan
(4) Provide technical capabilities and coordinate with the Company's auditor (a Big 4 firm)
Results Achieved: The major differences between GAAP and IFRS were identified and measured and our team was able to provide a preliminary IFRS version of the Company’s financial statements. The team also conducted a more detailed analysis of how the changes are to be implemented across the company and how to best communicate these changes to key individuals within the organization. Finally, the team assessed the impact to the financial systems and developed a strategy for recording transactions for the transition year (2010).
Industry: Mining
Project: IFRS Implementation
Location: Toronto, Canada
Summary: Listed on both the Toronto and New York Stock Exchanges this organization chose to convert to IFRS with the Canadian timeline. Canada required the use of IFRS beginning in 2011.
Organizational Challenge: Because the client is listed on both the Canadian, Toronto Stock Exchange and on the New York Stock Exchange, they were not required to convert to IFRS, but chose to adopt IFRS according to the Canadian timeline. This organization decided to adopt as of January 1, 2011 and their first set of IFRS financial statements was for the quarter ended March 31, 2011. For SEC purposes, the client was a foreign filer and allowed to file IFRS statements with no required reconciliation to U.S. GAAP. Given that they are traded on both the Canadian and New York Stock exchanges, they needed an individual with strong U.S. GAAP and strong accounting policy research skills to be part of the conversion team in Toronto.
How Resources is Helping: The team provided a senior, qualified expert in both US GAAP and SEC accounting matters to assist in the implementation of the IFRS Conversion Plan. Completing this plan included:
(1) Drafting 25+ IFRS Accounting Position Papers
(2) Creating 45+ IFRS Accounting Policies
(3) Building IFRS training materials for several different levels of client personnel
(4) Tracking progress as to the development of IFRS Accounting Position Papers and Policies
(5) Marking changes to IFRS Authoritative Literature
(6) Leading IFRS / US GAAP convergence activity
Results Achieved: The implementation of the IFRS Conversion Plan was successful, and the overarching goal of avoiding any adverse feedback in the trading price of the organization's shares and any negative reaction from shareholders and analysts was achieved during the project.
