The
International Financial Reporting Standard, IFRS, for Small and Medium Scale
Enterprises, SMEs is expected to be adopted from December 31, 2014.
The
Senior Manager, Capital Markets and Accounting Advisory Services Group,
PriceWaterhouseCooppers Nigeria , PWC, Uloma Ojinmah, disclosed this during an
IFRS Media Training Workshop organised by BusinessDay Nigeria in Lagos.
While
speaking on the Financial Reporting Council of Nigeria, FRCN roadmap and its
implication, she said: “The phase one implementation of the IFRS started with
the publicly listed entities and significant public interest entities. These
entities were expected to prepare their financial statements using applicable
IFRS by December 31. 2012.
For
the phase two implementation, other public interest entities are expected to
comply with the standard. In fact, all public interest entities are expected to
mandatorily adopt IFRS, for statutory purposes by December 31, 2013. The other
public interest entities are entities that are not listed which have
significant public interest because of the nature of business, size and number
of employee. For the phase three, it is expected that SMEs will adopt theirs
from December. In fact, IFRS for the SMEs shall mandatorily be adopted as
December 31, 2014.”
She
explained that while adopting the IFRS for the first time, a company’s first
set of IRFS financial statement should present its financial position and
performance as if the company had reported using IFRS.
According
to her “20 optional exemptions and seven mandatory exceptions limit extent of
retrospective application are available to guide companies when applying the
principle.
On
the implementation impact, she said “Adjustments are required to assets and
liabilities to establish the opening statement of financial position. Such
adjustments, which are to be passed via retained earnings include: Recognition
of new assets and liabilities; De-recognition of some assets and liabilities
and Re-measurement of some assets and liabilities by using fair value versus
historic cost.”
Speaking
further, Ojinmah said that IFRS will have a broad impact on Nigerian companies
as every details of information required in preparing financial statement are
required.
Some
of the impact, according to her, include: capital impact, tax impact, analyst
reactions, share price impact, peer comparability, amongst others
She
stated that IRFS will impact businesses in may ways, such as: people, business
relationships , tax and regulation, communications, financial implications, and
systems and processes.
Vanguard
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