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IT Modifications<< Back to IFRS: It's Not as Hard as You Think A clear IT strategy will be needed to address accounting policy changes resulting from IFRS requirements for recognition, measurement and disclosure. IT systems will require some modification so that financial data support IFRS accounting and financial reporting requirements. Such changes are likely to affect general ledger, asset management, treasury, financial instrument and payroll systems. Depending on a company’s needs, IT systems may also need to change to capture data to support internal valuation calculations consistent with IFRS requirements when active market data is not available. Establishing a multidisciplinary IT project team, which could include representatives from accounting, finance, tax, treasury, technology and training, is one solution. The team could provide valuable insights on the broader implications of the redesigned IT processes for each of the company’s applications, and could also provide good information for communications. The IT conversion process usually consists of four steps: • A preliminary analysis of the functional specifications to determine which IFRS standards will affect IT-based transaction processing. At this point companies should identify those information system modules that may be affected. There should also be an assessment of the internal factors involved in the conversion project. • A detailed analysis of IFRS implementation as it affects a company’s transactions. As functional specifications are developed, the organization undertakes an assessment of information systems and organizational capabilities needed to address the conversion. This assessment generally has one of two outcomes: a) existing IT systems are modified to incorporate the changes required, or b) a short-term solution is implemented, which may not be fully integrated into existing IT systems, but will work with data extracted from the applications used. • The implementation of new systems on a go-live date. • A focus on continuous maintenance that incorporates identification of future IFRS-related changes. IT is integral to IFRS conversion, and using strategic planning to integrate IT changes into the process also provides a chance to look beyond IFRS. This
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