Bridging GAAP in accounting

Customers and members of financial institutions such as credit unions will also benefit. “They will have to disclose a lot more information on their loan receivables,” says Hackett. “They will also have to give much more information on risk. This additional transparency will build confidence in the future.”

The finalised new standard is expected to be published at the end of this year and to come into force in 2015. “For most SMEs with fairly straightforward businesses there won’t be much noticeable differences,” she adds. “They might see a bit more disclosure but there will be no difference in the numbers. However, even for smaller companies there is a need to start planning ahead now. While the new standard will come into force in 2015 that means that the 2014 numbers will be covered by it – that’s not much more than a year away.”

O’Keeffe advises companies to start preparing immediately and to talk to their auditors and advisors about the impact of the changes. “Larger companies should appoint a project manager to take responsibility for it. They have choices within the rules and they need to decide what the right ones are for them. There may also be systems changes required. Smaller companies should talk to their auditors and advisers who can guide them in what they have to do to prepare and have the right information and numbers when the time comes. Also, where a company is considering an IPO they need to decide on whether to move over to full IFRS straight away.”

Finally, Hackett believes that the new standard should be seen as an opportunity rather than additional obligations. “Don’t be afraid of the change,” she advises. “There are people out there to help. Companies should see this as an opportunity to improve their financial reporting. The better the quality of information you have the better you can run your company and banks and investors will have more faith in you as well. It is good for business.”