International Financial Reporting Standards (IFRS)

Convergence from generally accepted accounting principles (GAAP) to some level of international financial reportingstandards (IFRS) is inevitable. As your business makes this change, we at Wright Ford Young & Co. will walk beside youevery step of the way, allowing you to focus on your core business. We’ll help you through this transition with minimaldisruption by:

• Translating the complex new standards into a language you understand
• Modeling the impact on your business
• Meeting with your internal and external stakeholders (shareholders, lenders, etc.) to explain how your business will be impacted
• Assisting you in every aspect of the actual implementation
• Providing detailed training to your team, as necessary

Since the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) enteredinto their 2006 memorandum of understanding, we have kept a watchful eye on their imminent convergence. Tominimize the upheaval caused by a total and complete convergence to IFRS, the FASB has been issuing, and will continueto issue through approximately 2012, new accounting pronouncements at an unprecedented pace .

The convergence to IFRS will have a significant impact on almost every U.S. business. Major changes on the horizon include:

• Revenue Recognition – Currently, U.S. GAAP features more than 100 different standards guiding revenuerecognition rules. When the new standard is issued, there will most likely be one six-step process to determineif and when revenue is recognized.
• Accounting for Leases – The bright-line tests in FASB No. 13 will be eliminated, as will operating leases. TheFASB’s goal is to get all company commitments, such as signed leases, on the right side of the balance sheet asrecorded liabilities.
• Consolidation – In the wake of the Enron scandal, the FASB attempted to close certain loopholes via FIN No. 46,which requires the consolidation of certain variable interest entities. The new consolidation rules will focus ona new definition of “control,” which will most likely be defined as, “the power to direct the activities of anotherentity in order to generate returns.”
• Financial Statement Presentation – Suffice it to say, financial statements will get longer and disclose much moreinformation. Comparative financial statements may be required. Statement of cash flows must be preparedusing the direct method. There may also be disclosure required that analyzes the changes in significant assetsand liabilities.

With so many changes ahead, you’ll want to trust your business to a client-friendly accounting firm with the experienceto get the job done right. At Wright Ford Young & Co, our clients include subsidiaries of or parent companies withoperations in Australia, France, Germany, the United Kingdom, Israel, India, China, Mexico, and Canada. For many years,our international clients have relied on us to accurately apply international financial reporting standards..