In recent years, we’ve seen an increase in the demand for GAAP conversion for many clients who are looking to pursue a public listing for their business. Being heavily driven by the growing number of businesses reporting under the IFRS (International Financial Reporting Standards), customers have asked for our help to convert their current primary accounting standards to IFRS.
And because of the drive to standardise financial statements on a global scale, we thought we’d look at just what the IFRS is, what it means to you, and how you can take advantage of the opportunities it presents.
What is IFRS?
IFRS, or the International Financial Reporting Standards, are a set of accounting standards developed by the International Accounting Standards Boards, which is quickly becoming the global standard for the preparation of public company financial statements.
Who needs to comply?
Any company who is looking to list their business publicly would need to consider complying to the IFRS, or if they don’t already comply, convert their current accounting standards to IFRS. The IFRS have been a part of financial reporting in the United Kingdom since 2005 when EC Regulation 1606/2002 (‘the IAS Regulation’) came into effect. The IAS Regulation requires companies with securities (either equity or debt) admitted to trading on a regulated market of any member state of the European Union to use ‘international accounting standards’ in preparing their consolidated financial statements.
What are the benefits of converting to IFRS?
By adopting IFRS, your business will be able to present its financial statements on the same basis as its foreign competitors, making market comparisons easier. This particularly becomes relevant for businesses who have subsidiaries in countries that require or permit IFRS – so that you are able to use one consistent accounting language, company-wide. You may find yourself as a subsidiary business to a parent organisation that is located in a country that has to use IFRS, or, they have foreign investors that has to use IFRS. Converting to IFRS is also considered beneficial if you are looking to raise capital abroad.
What this means for you?
We have been working with companies who have chosen to transition to a more international, publicly-listed growth path, for many years, and have been involved in the IPO process on a number of levels. Whether they were simply trying to re-align their accounting language, or whether they were actively pursuing an IPO, companies have chosen us to help their finance teams get ready for public and international growth. Our methodology has been built up from experience and information gained during a number of successful public listings, and working with global organisations. We tailor our services according to your needs, and where your growth strategy. You can take advantage of the extensive experience that we’ve built up, by setting in motion a financial foundation poised for growth, compliance and operational efficiency.