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Improving Your Board’s Performance – Implementing IFRS

Improving Your Board’s Performance – Implementing IFRS. Russell Frith. IFRS – Role of the Non-executive director. Why move from UK GAAP to IFRS? Outline of conversion programme Implications for organisations Implications for non-executive directors Key questions for non-executive directors.

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Improving Your Board’s Performance – Implementing IFRS

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  1. Improving Your Board’s Performance – Implementing IFRS Russell Frith

  2. IFRS – Role of the Non-executive director • Why move from UK GAAP to IFRS? • Outline of conversion programme • Implications for organisations • Implications for non-executive directors • Key questions for non-executive directors

  3. Why move to IFRS? • Public sector represents a considerable proportion of the economy and includes some very large entities which, if they were listed companies, would already be applying IFRS • IFRS is regarded as the international gold standard • Convergence has been the aim across the world • Treasury want to be seen to be using the highest standards • Was unclear until July what the UK timetable for adoption of IFRS might be – now proposed as 1 January 2012

  4. Conversion programme – Trigger Point Strategy • Why have a Trigger Point Strategy? • Keeps IFRS on the agenda • Ensures that difficult issues are tackled earlier • Ensures budgetary effects supported by understanding of the issues • Should result in smoother preparation of first full IFRS based accounts • Less risk of qualification of audit opinion in 2009/10

  5. Outline of Conversion programme

  6. Findings from opening balance sheet audits • “More work needed” • PFI/PPP arrangements • Leases • Employment costs • Intangible assets

  7. Implications of IFRS for organisations • Changes to accounts • Longer, more disclosures, new terminology • PFI/PPP assets likely to be on balance sheet • Impact on budgets/estimates • Alignment project, treatment of PFI/PPP projects

  8. Implications for non-executives • Ensuring that management has a project plan • Oversight of the conversion programme • Involvement in shadow accounts process • Consideration of auditors’ reports • Understanding the impact on budgets/estimates • Impact on risk register

  9. Key questions for non-executives • Are management’s conversion plans appropriate + on track? • What are the main risks to successful conversion? • What did the external auditors say about the opening balance sheet and the shadow accounts? • What is the impact on our budgets and how we are monitored by HM Treasury/sponsor department?

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