Just when you thought you had tamed the savage accounting demons
like revenue recognition and knew the rules of the game so well you were
on top of your game, Lucy Brown is getting ready to yank the ball away.
Every so often the accounting profession makes potentially radical changes to the score keeping process and rules. For the under prepared, another massive change is almost here.
Accounting rules and changes move slowly until they acquire momentum and become unstoppable weapons of change. Think of a snowball changing into a massive avalanche cascading down a steep mountainside crushing unprotected trees and people.
International Accounting Reporting Standards (IFRS) is reaching that momentum for unprepared US companies. See the Wall Street Journal article titled US Nears Accounting Shift for more details to gain some perspective on your exposure.
Technically the US generally accepted accounting principle (GAAP) standards and the rest of the world's accounting standards are about to change to align. In some cases the international standards are moving toward US rules. In more cases, the US rules will move toward international rules.
Consider a sports analogy. What this means to you is that you know how to play baseball. You do not know how to play cricket. You know you are basically going to start playing cricket against teams and players who know the rules, have experience in the sport, and have their training and reporting metrics set for cricket. You do not.
Larger companies and Chief Financial Officers (CFOs) have known this was coming and some are very prepared. Many others are not. Even if your business is aware of the timelines and areas of convergence needed, how well has your CFO explained the new rules of the game to you?
Have they shared things like the following areas you need to know about?
If your eyes glaze from this overview, consider asking for clarification. After all, remember what the trees look like on a mountainside after a major avalanche occurs. That could be your business or you.
http://ezinearticles.com/?How-Prepared-Are-You-For-Almost-All-the-Accounting-Rules-Changing-Dramatically-Overnight?&id=6904091Every so often the accounting profession makes potentially radical changes to the score keeping process and rules. For the under prepared, another massive change is almost here.
Accounting rules and changes move slowly until they acquire momentum and become unstoppable weapons of change. Think of a snowball changing into a massive avalanche cascading down a steep mountainside crushing unprotected trees and people.
International Accounting Reporting Standards (IFRS) is reaching that momentum for unprepared US companies. See the Wall Street Journal article titled US Nears Accounting Shift for more details to gain some perspective on your exposure.
Technically the US generally accepted accounting principle (GAAP) standards and the rest of the world's accounting standards are about to change to align. In some cases the international standards are moving toward US rules. In more cases, the US rules will move toward international rules.
Consider a sports analogy. What this means to you is that you know how to play baseball. You do not know how to play cricket. You know you are basically going to start playing cricket against teams and players who know the rules, have experience in the sport, and have their training and reporting metrics set for cricket. You do not.
Larger companies and Chief Financial Officers (CFOs) have known this was coming and some are very prepared. Many others are not. Even if your business is aware of the timelines and areas of convergence needed, how well has your CFO explained the new rules of the game to you?
Have they shared things like the following areas you need to know about?
- Executive summary of the key change areas.
- Timeframe when each of your major accounting policies must conform to IFRS.
- System and procedure changes needed to gather the new data to account on the new rules.
- Estimated financial magnitude of the changes to earnings and equity
- How long two sets of books need to be kept
- Which current IT projects may be delayed to make room for this IFRS conversion
- How bonuses and incentives will be effected
If your eyes glaze from this overview, consider asking for clarification. After all, remember what the trees look like on a mountainside after a major avalanche occurs. That could be your business or you.
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