Presentation on theme: "Alison Scott AD Local Government CIPFA IFRS – are you ready?"— Presentation transcript:
Alison Scott AD Local Government CIPFA IFRS – are you ready?
cipfa.org.uk Local Government Timetable /10 IFRS Comparatives 2010/11 First year of IFRS reporting Transition date Opening IFRS balance sheet (1 April 09) Comparative IFRS year end 2009/10 comparatives First IFRS year end 2010/11 Annual report (and 2009/10 comparatives) TODAY
cipfa.org.uk What it Means in Summary Significant differences Some differencesNo significant differences Format of financial statements Components Non-current assets held for sale Capital grants? Borrowing costs? Leases Group accounts boundary Employment benefits Prior period adjustments Future changes to accounting policies Segmental reporting Investment property Pension fund accounts Intangible assets Impairment losses Disclosures generally PFI (SORP adopted) Financial instruments (SORP adopted) Stocks Provisions Post balance sheet events
cipfa.org.uk Possible Government Mitigation ●Property leases: ●Reclassification of operating leases as finance leases ●Reclassification of finance leases as operating leases? ●Reclassification of leases in lessors accounts? ●Accruing for holiday pay and other employment benefits?
cipfa.org.uk Impact of Codes Financial performancePracticalities of conversion Impact on bottom line and Council tax (note discussions with CLG and devolved administrations) Stakeholder expectations Future planning and policy Prudential borrowing Availability of adequate resource Data gaps, e.g. contracts and leases Embedding into budgeting Systems and processes Impact on faster close Scale of the task
cipfa.org.uk Practical implications Processes Systems People Accounting policies & procedures Updated & new controls New valuations Impairment modelling Increase data collection Management reporting Budgeting process Accounting and consolidation systems enhancement Data gaps New systems required Update chart of accounts New procedures Training Communication strategy Training strategy Project Management support Resource / skills to manage the change Corporate governance Embedding knowledge – new policies and processes
cipfa.org.uk CIPFA Suggested Timetable StepTiming 1. High level impact assessmentASAP by May Identify changes to accounting policiesASAP by May Identify key staffASAP by May Train key staffOngoing throughout 5. Identify systems and procedural changesMarch – July Identify information required for restatementMarch – Sept Develop skeleton statement of accountsMarch – Sept Obtain information required to restate 1/4/09 BSMarch – Sept Identify likely impact on budgets (if any)March – Sept Implement systems and procedural changesJuly 2009 – Jan Train all relevant staff and key membersOngoing from July Restate 1/4/09 balance sheetJuly – December Compile 2010/11 budgets and later on IFRS basis Oct 2009 – Jan Testing of systems and procedural changesJuly 2009 – March Restate 2009/10 accountsApril – December Produce 2010/11 accounts on an IFRS basisApril – June 2011
cipfa.org.uk Example Plan Extract Restate opening balance sheet Property Plant and Equipment Leases Identify lease arrangement information risk assessment restate where necessary Identify other arrangements assess against IFRIC 4 restate where necessary
cipfa.org.uk Key actions ●Steering group with overall responsibility for IFRS ●Communicate the importance of the project ●Allocate sufficient resources to the project ●Understand what IFRS will mean for key data and information requirements and systems ●Brief stakeholders and manage expectations ●Incorporate into internal management reporting – ‘business as usual’
cipfa.org.uk IFRS – Are You Ready? questions/comments