International Financial Reporting Standards

The change to International Financial Reporting Standards (IFRS) represented the most significant shift in financial reporting in the UK for more than a generation. Its implications reached far beyond technical accounting, and many companies have found that their entire business practices are impacted.

From financial instruments such as hedging, and pensions and tax, companies must understand how the new standards affect them, and the wider industry sector in which they sit.

The 2007 budget announced that the UK public sector will also be adopting IFRS. This will have a substantial impact for many public sector organisations and will encompass areas such as the setting and measurement of performance targets, budgeting and forecasting, in addition to financial reporting.

Many companies have now produced their second set of results under IFRS and both listed companies and the capital markets have had another year to become accustomed to the standards. PwC's survey of senior finance executives, in Summer 2007, presented a mixed picture.

As expected companies are getting more used to IFRS, so are finding many aspects of IFRS reporting easier than twelve months ago. Nevertheless there remains significant doubt about the benefits to individual companies and the information available to the capital markets.

AIM companies have benefited from learning from the experiences of the listed companies that have already converted, and begin the timely implementation of frameworks that are robust enough to sustain in the long term.

Already converted to IFRS?

Conversion to IFRS is not, however, the end of the story. The continued need to embed IFRS reporting across wider systems and processes will mean that companies must continually adapt their finance function to meet the IFRS challenge and achieve long-term efficiency.

PricewaterhouseCoopers' IFRS specialists have extensive expertise in understanding the implications and processes of IFRS reporting both at the conversation stage and in this crucial period that follows in a tailored way that meets their needs. We help clients to navigate their way through each stage of the process. In addition, we have developed Access IFRS, a free website offering research material, news and feature articles, publications and podcasts for all professionals affected by IFRS. To take advantage of this market-leading resources log on to: www.ifrs.co.uk