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Semelhante a Corporate Reporting How Your Business Will Be Affected By Impending Regulatory Changes
Semelhante a Corporate Reporting How Your Business Will Be Affected By Impending Regulatory Changes (20)
Corporate Reporting How Your Business Will Be Affected By Impending Regulatory Changes
- 1. Corporate Reporting How your business will be affected by impending regulatory changes May 18, 2010
- 2. Today’s presenters Susan Clayton is PowellDorian’s Director, Financial Reporting. She has over 24 years of experience managing finance and administration departments and related functions such as contract administration, human resources and corporate secretary duties. Susan has held the positions of CFO and Director of Finance for several companies in the technology industry and now spends most of her time providing IFRS and Private Enterprise GAAP consulting expertise to a wide range of organizations. Pamela Egger is PowellDorian’s Director, General Counsel Services and provides services in the area of corporate compliance. She has over 10 years of experience as a securities and corporate finance lawyer in Vancouver, BC, serving clients ranging from emerging private companies (i.e. listing via IPO’s, RTO’s or CPC’s) to TSX Venture Exchange and TSX Exchange (senior) listed companies. Pamela Egger, B.A., LL.B. Susan Clayton, BBA, CGA
- 13. Considerations before adopting IFRS Advantages Disadvantages Generally accepted as more relevant, understandable, reliable and comparable on a global basis. Standard is more principle based resulting in fewer bright lines and rules Adopted by Canadian public companies and by over 100 countries worldwide. Disclosure requirements are significantly greater than required under Private Enterprise GAAP May provide a competitive advantage against enterprises who fail to adopt a globally-harmonized standard. The conversion process can be lengthy, and require significant resources. (eg, contracts such as banking agreements and executive compensation may require renegotiating; staff training both inside and outside of finance regarding implications, etc)
- 14. Considerations before adopting Private Enterprise GAAP Advantages Disadvantages Based on current Canadian GAAP – standards are straight forward and require little change Contracts such as banking agreements and executive compensation may require renegotiating Likely best route if no plans to access public equity or debt market Overall effectiveness will be reviewed after standards have been in place for a few years = possible significant future changes Disclosure requirements are less than those required under IFRS May not be a long-term solution as there is a good chance that the standards will evolve to IFRS
- 15. What needs to be done? First and foremost, determine which standards are applicable to your company Publicly accountable enterprises ( no choice exists) Private enterprises (choose wisely!) IFRS PRIVATE ENTERPRISE GAAP
- 20. Schedule of events Select accounting standard Planning phase Development Implementation Jan 1 2011 Review impact of standard on financial statement components Select accounting policies required for new standard and resolve any issues Calculate any adjustments required Draft financial statements and notes Now July 1, 2010 Oct 1, 2010 Analyze impact on other business areas Design system modifications as required Identify requirements, ie, training Develop and implement system modifications
- 22. Compliance models Corporate Compliance Board of Directors Management External Stakeholders Board External stakeholders Management Traditional model Optimized model Corporate Secretary
Notas do Editor
- Why are standards changing? Generally, public companies are operating in a more global environment which emphasizes the need for a standardized accounting policy. This has led to the creation of IFRS and the mandatory requirement that all publicly accountable companies use it. For private companies, the level of complexity and amount of disclosure required for public companies is too much. This has resulted in a standard that has simplified a number of the recognition and measurement principals and brings in aspects of IFRS. That being said, private companies have an option to use either IFRS or PE GAAP.
- As a private company, the first step in making a decision regarding which standard to adopt is to analyze the business, accounting and stakeholder considerations
- In general, both standards come with both advantages and disadvantages.
- Both standards have disadvantages and disadvantages that you need to be aware of before selecting a standard. The bottom line is that before selecting a standard, private companies need to weigh the short and long-term needs and realize that cost is only one factor.
- For public companies, the choice is simple as there is no choice. ALL publicly accountable enterprises must adopt IFRS. Any private company in Canada that is currently using Canadian GAAP, which is virtually everyone, needs to make a choice…..and soon. STATUS QUO IS NO LONGER AN OPTION
- Both IFRS and GAAP for PE provide transitional relief for an entity that it applies when it first adopts the standard and specifies presentation and disclosure requirements to explain the effects of the transition.
- Regardless of the choice, the resulting account change may have several enterprise-wide impacts potentially changing critical financial information that affects budgets, key financial metrics, contractual relationships, compensation arrangements controls and processes…for a start.