IFRS convergence progressing well

To ensure full value, quality in financial reporting:

Sanjeevi JAYASURIYA

Sri Lanka is moving towards International Financial Reporting Standards (IFRS) and this is the most suited time to effect the transition as the Colombo stock market continues its upward movement consolidating its position as the best performing market in the Asian region.

The country produces the best annual reports in comparison to other countries and the evolutionary process is a pragmatic way forward, KPMG India Accounting Advisory Services Executive Director Vishwanath Venkataramanan said.

“There may be challenges when moving towards a new set of standards and there are proposals to move forward the mandated date to 2015 from January 1, 2012. However, there is a clause that permits early application and we are going to be in an extended period of transition where accounting standards keep on evolving,” he said at a meeting held on IFRS implementation and next steps organized by the Association of Certified Chartered Accountants and KPMG Ford Rodes yesterday in Colombo.

“The IFRS implementation needs technical skills and knowledge and continued process of learning. It is necessary to have leadership and direction to fine tune and shape the accounting standards. Sri Lanka, India and Pakistan face the same issues and it is important to have an agenda in implementing the process,” he said.

A collective effort is needed in going forward which will play a dominant role and a new framework should be in place to move the business as usual.

Though IFRS convergence is a challenge it will ensure full quality, full value in reporting in modern day context. All accounting policy choices need to be explored with technical skills to make the process successful and an IT system strategy needs to be in place for sustainable implementation. A number of reporting cycles need to have produced on IFRS financial statement for effective results.

“Stringent rules alone cannot address the issues at hand. A combination of rules and a certain level of judgment is necessary. Constant knowledge upgrade is vital for a quality outcome and need to identify gaps and quantify them to take necessary measures,” he said.