First adoption and implementation process of IFRS
This service is aimed at helping companies to adapt their financial statements, to the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).
International companies and investors need to understand the financial statements of local companies, but they will not be able to be performed, if their numbers only meet tax requirements and don´t meet with international measurement and disclosure standards such as International Financial Reporting Standards – IFRS.
To determine reliable financial indicators with your financial statements, calculating i)EBITDA**, ii) ROA**, iii) WACC** and others, it is necessary to have a certain usefulness on financial criteria, as well as assets calculated on IFRS financial bases that are a more reliable in our financial statements, issued on criteria of local tax legislation, so that it can be comparable with important companies and groups worldwide.
- EBITDA: ¨Earnings Before Income Tax, Depreciations and Amortizations¨.
- ROA: ¨Return on Assets¨.
- WACC: ¨Weigh Average Cost of Capital¨.
Providing support in the first adoption of IFRS includes assisting our clients in adapting their financial statements to the International Financial Reporting Standards (IFRS), step by step ensuring that the journal entries are supported and proper analyzed to carry out their financial statements to a reasonable presentation through an implementation of the IFRS.
Making IFRS adjustments will not represent that corrections are made to fiscal errors in an administrative accounting, but rather to reflect measurements and disclosures based on international criteria, because the fiscal accounting must be done completely and correctly from its origin.
IFRS 9, for example, includes a new assessment criterion through the analysis of Expected Credit losses (ECL), for which we have an economist with an extensive experience in Inter-American Development Bank (Banco Interamericano de Desarrollo, BID) who, together with our auditors, will be able to generate the mathematical and econometric models necessary to calculate expected losses on a reliable basis to determine the necessary adjustment (s).
Examples of adjustments that can be performed are the next: bad debts, inaccurately stock valued, non-existent liabilities, among others.
The term of the lease, for example, is an issue that impacts the initial amount according to the new IFRS 16. How do we determine this term? What other IFRS should be considered for the term analysis for these contracts? Remember that you only have 3 months to make this adjustment in the 2019 period.
