IFRS Conversion

Following the update in the 2008 budget, government bodies will be required to adopt International Financial Reporting Standards (IFRS) for their 2009/10 accounts and will also be required to restate 2008/09 accounts using IFRS to provide comparative information.

Central government, NHS Trusts, Primary Care Trusts and NHS Foundation Trusts will all need to adopt IFRS within this same timetable. The December meeting of the CIPFA/LASAAC Joint Committee agreed that the first local authority IFRS based accounts would be produced for 2010/11.

IFRS is likely to be a challenge for many public sector organisations. The implications are complex and wide ranging. IFRS is not only a technical accounting issue for the finance team and the impact of the changes will expand to encompass many areas of the organisation such as the setting and measurement of performance targets, budgeting and forecasting - as well as financial reporting.

Process and systems changes are inevitable. Effective timely communication of the issues, both internally to employees and externally to stakeholders, is critical. The financial impact will vary widely from one body to another but in all cases the broader implications are wide reaching.