ACCOUNTING ADVISORY SERVICES
Moving towards IFRS would lead to certain fundamental changes and would impact businesses at large. Companies will have to examine the implication of this move on their performance and business.
Conversion to IFRS will require the retroactive restatement of certain historical periods presented within a company's first set of IFRS based financial statements. Implication of change in accounting would have a direct implication on the way businesses are run. For example, it could affect credit rating, debt covenants, dividend distribution, employee KPI and bonuses, managerial remunerations, financial-product's design, taxes, exit clause of your investors, contingent consideration (on acquisition).
- Back-office and support functions such as maintaining accounting records, payroll processing and delivery, statutory compliances entail resources in terms of manpower, competence and accuracy, and significant time, all these translating these functions into a significant cost centre for an organisation.
- While organisations, today like to focus more on their core business operations without compromising on their back-office and support functions, they wish to transfer back-office and support functions including compliance activities to such an outsourced services provider which is not only competent and knowledgeable but also brings cost savings to an organisation.
- At QED Corporate Advisors, our Compliance and Outsourcing (C&O) Team of tax and regulatory services practice offers outsourced book-keeping, payroll processing and other statutory compliances services. The team packs rich experience in providing accounting solutions and payroll processing services to various domestic and multinational clients.
IFRS conversion is more than just an accounting change.
Many areas of a company outside of the finance function may be impacted, including:
- Information technology & its architecture
- Group structures
- Direct and indirect taxes
- Strategic plans (IPOs, investor relations, executive compensation)
We, at QED, believe as a result of all of these developments that companies should consider the following:
- Focus on the challenge.
- Assessment & Understanding.
- Adapt to Change.
- Monitoring and Review.
- Identification of possible implementation.
Accounting Standard-setters in emerging Economies are facing various challenges in adopting IFRS, such as the following:
- Non-Compatible legal and regulatory environment
- Concerns over SMEs
- Economic & Financial Environment
- Level of Preparedness
- Skill levels of preparers
IFRS Conversion Process
Given the strategic and business issues related to IFRS, as well as the investment of time, monetary and other resources necessary to transition a company, IFRS is a key focus area for companies. Sound financial reporting structure is imperative to the economic development and effective functioning of capital markets , and helps in mitigating risks, builds investor confidence and optimally utilising scarce economic resources.
We at QED, believe that, Quality Reporting is a pillar on which the financial reporting structure of an economy stands on.
GAAP/IFRS conversion may have firm-wide effects, impacting various arms of an entity, right from financial reporting, taxes, internal control, treasury to HR, and other legal aspects. Our AAS professionals can assist our clients in various ways including:
- performing end-to-end conversion from local GAAP to IFRS/ US GAAP
- conversion from International GAAP to Indian GAAP for Indian consolidation
- Project managing the conversion and consolidation process
- Eagle’ Eye diagnostic review of GAAP differences
- suggest appropriate accounting treatment where IFRS/ US GAAP provides option to choose between alternative accounting treatments
- assisting with drafting IFRS/ US GAAP financial statements
- providing profit/ equity reconciliation from local GAAP to IFRS/ US GAAP for management purposes
Our AAS professionals can assist in proactively understanding and addressing special situations of our clients, like Capital Raising, Business Acquisition, Divestures etc.,..
eXtensible Business Reporting Language (XBRL) is an open, global information standard that defines and provides names- or “tags”- for numbers, narrative text, dates and other facts in a business report. It is often described as “bar coding” for financial and business information. Key benefits that XBRL will bring to businesses include:
- ability of different regulatory bodies to use the same electronic data set – avoiding duplication & reducing compliance costs
- automatic exchange and reliable extraction of financial information across all software formats & technologies
- improvement in the efficiency with which various tools can generate comparisons & analysis
Implications for Indian companies
Every company needs to quickly adapt to this new reporting challenge. Some of the key challenges that companies might encounter as they adopt XBRL reporting are:
- Trained staff to understand XBRL, timely tagging and validation process
- The software tool to be used for the purpose of tagging
- Initial efforts involved in tagging, resolving errors arising from validation checks
- Adherence to prescribed timelines for timely closure of reporting
Our services are structured to address the following:
- compliance with the Ministry of Corporate Affairs mandate
- flexibility to address the evolving financial reporting framework in India
- scalability from outsourced services to in-house processing
We offer our clients, a comprehensive service-offering around your XBRL needs, to ensure our clients compliance health.