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Survey on IFRS transition costs in Canada

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16 Jul 2013

The Canadian Financial Executives Research Foundation (CFERF), published the results of an online survey on 'The costs of IFRS Transition in Canada'. They reveal that IFRS transition costs in Canada were generally in line with expectations.

The results of the survey are based on responses from 139 senior financial executives in Canada of which 105 worked for organisations that had adopted IFRS by the time of the survey. Canadian companies adopted IFRS in 2011 and the first annual IFRS compliant financial statements were filed on 31 December 2011. The survey was performed in January 2013, approximately one year after the first IFRS statements were filed.

Key finding of the survey was that the costs of adoption of IFRS in Canada were planned for and expected:

  • Most costs turned out to be the same or less than budgeted
  • Costs were significant but manageable.

The study also found that:

  • 62% of companies’ transition budgets were under $500,000
  • For some, the key drivers of costs were identifying more issues than anticipated and resolving differing interpretations of IFRS
  • Some managed their costs by hiring employees who were well versed in IFRS, often from experience implementing IFRS abroad
  • Nearly all respondents said transition required little to no changes in their contracts, thus, minimal renegotiation costs
  • Three-quarters said they did not have to make significant changes to their IT infrastructure as systems were more flexible than had been thought.

A draft version of the survey report was discussed at the June 2013 IFRS Advisory Council meeting, where it was contrasted with an earlier report on IFRS adoption in Korea.

CFERF is the research arm of Financial Executives International Canada (FEI Canada). The survey The cost of IFRS transition in Canada and a corresponding press release are available through the FEI Canada website.

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