As we inch closer to the conversion from U.S. GAAP to IFRS standards, experts predict IT departments will be affected most — is yours prepared?
The costs of conversion for IT departments will be the highest, according to International Financial Reporting Standards: The information systems impacts of IFRS, an analysis by KPMG.
And the analysis went on to state there was a shortage of available IT staffers who could effectively translate or interpret IFRS requirements for IT changes, and fix technical problems that will arise through the conversion to IFRS.
Where will all the IT costs come from? IT departments will feel the costs of the conversion:
- Reconfiguring or modifying new systems
- Continuing support and vendor maintenance
- Managing projects
- Finding additional resources and training needs, and
- Creating short-term solutions for conversion deadlines, as well as long-term fixes later on for the same problems.
A timeline in the KPMG analysis predicts a transition period of four years in the conversion from U.S. GAAP to IFRS for U.S. companies. The transition period includes an assessment phase (one year); a build, implement and roll-out phase (two years); and a cut-over phase — from local general ledger to IFRS general ledger (around a year).
