Implementation of IFRS

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					Implementation of IFRS

  Experience from Austria
      Robert Reiter
   President of AFRAC

        ASEM IFRSs Robert Reiter   1
              First experience
• Österreichische Elektrizitätswirtschafts-AG
In our opinion, the consolidated financial
statements present fairly, in all material
respects, the financial position of Verbund at
December 31, 1997 and 1996 and the
results of its operations and its cash flows
for the years then ended in accordance with
International Accounting Standards (IAS).
Vienna, 9 April 1998
Dr. Paul Hassler m.p. Dr. Robert Reiter m.p.
Certified Public Accountants

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•   Comparable Figures for prior year
•   Understanding the frame work of IAS/IFRS
•   Concentration on materiality
•   Notes

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           Specific Issues
• Cash generating units
• Impairment test for power plants because
  of strong competition and free market
• Deferred Tax Asset
• Pension accrual
• Derivatives

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• Detail of Notes
•    transactions with related parties versus
•    bank secrecy per constitutional law
• Understandability for the reader
• Reconciliation with annual report

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        Austrian Legislation
• IFRS mandatory for group accounts of
  listed companies
• Local GAAP for individual accounts
      basis for tax and dividend payment
      creditors protection (?)

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Austrian National Standard Setting
• Competence
 Ministry of Justice
 Ministry of Finance (Banks, Insurances)

Advice by AFRAC

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     Reaction by companies
• Understanding Objectives of IFRS by
• Personnel ressources
• Education and Continuing Training
• Fast Close

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• Fast Close
• Improvement of Organisation
• Earlier results
• More accurate results on a timely basis
• Better efficiency
• Audit opinion for 1997 in April 1998
• Audit opinion for 2005 in January 2006

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          Timing/Work load
• Preparation work starts earlier
• Standardization of work flow

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    IFRS for Austrian SME ?
• Definition of SME
• IFRS for Austrian SME
    Double accounts –tax requirement
    Annual Report (Lagebericht)
    Knowledge of IFRS

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        Reaction of Auditors
• Use of audit principles
•   Local GAAS
•   ISA (in addition, no carve outs)
•   Art 26 of the 8. EU Directive
• Audit Opinion
• Reporting Requirements in Austria

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            Audit Opinion
• ISA 700

  fully accepted by Company Amendment
  Act 2005 (GesRÄG 2005)

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Reporting Requirements in Austria

• Report including the audit opinion
• Local GAAS require review of annual
• History of long form report

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          Auditor´s Issues
• Knowledge of IFRS and training
• Knowledge of ISA and training
• Current developments

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               Auditor´s Issues
• Current developments of ISA
•   clarity project (ISA 200)
• Audit oversight bodies
•  Knowledge of local GAAS and ISA by Non-
•  Practioners
•     professional judgment
•     professional scepticism
•     responsibility in respect to fraud and error
•     working papers

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              Auditor´s Issues

•    „ as endorsed by the EU“ versus
       full IFRS
• in case of no differences
       wording of the audit opinion
• Liability issue: limited liability only for
  statutory audit

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