The Roman emperor Augustus said it first: Festina Lente, or Make Haste Slowly.  When it comes to IFRS, companies are taking his advice. 

Only one thing is now clear about IFRS in the United States: no company intends to invest in the transition without a date certain from the SEC.  Moreover, if Canada is any precedent, many companies may be slow to invest even in the face of a date certain.  That was the word both from the podium and from the crowd at a recent conference on financial reporting.

Speakers from United Technologies Corporation, Bank of America, URS Corporation and Gowling Lafleur Henderson addressed IFRS transition at the Marcus Evans Financial Reporting Excellence conference in Boston on May 18.  You may want to know:

•  IFRS could change your taxes even if you don’t report in IFRS.  When deciding how much of a firm’s revenue is subject to income tax in their jurisdictions, tax authorities tap databases of comparable firms.   So U.S. companies on GAAP and Canadian companies on IFRS will soon be setting benchmarks for each other, despite the differences in their accounting standards.  Moreover, authorities also consider local asset presence as a factor in their determination.  With capitalization of R&D under IFRS, companies may find their local asset footprint shifting, said Dale Hill, partner and national leader of Gowling Lafleur Henderson’s Transfer Pricing Competent Authority Group.
•  Beware of outside advisors. Speakers were unanimous in warning against relying too much on outside advisors for IFRS transition, both because of the expense and because of the importance of developing IFRS expertise in-house. 
•  Expect IFRS to put a smile on the face of your IT department.  Daniel Crawford, IFRS manager at United Technologies Corporation said, “When we tell our systems people that we'll need dual reporting capability on everything by 2011, they laugh at us."
•  Customer loyalty programs imply deferred revenue under IFRS.  “In order to avoid carrying this deferred revenue indefinitely, Canadian airlines recently changed the redemption time limit on miles,” said Karen Ingwerson, senior manager, accounting policy at Bank of America.
• \Government contractors face a challenge.  Said Marianne Aguiar, director, revenue assurance, URS Corporation, “Our corporate controller was talking with a government auditor and asked him about IFRS. The auditor replied, ‘What’s IFRS?’”
• IFRS is not just an accounting project.  Again, speakers were unanimous in pointing out that IFRS may change the score for every aspect of a business..  To focus management attention on IFRS, show how the transition will affect incentive compensation. 

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