North America’s transition to International Financial Reporting Standards (IFRS) is no longer a question of “if”, but “when” and “how.”

The discussion has intensified since the US Securities & Exchange Commission proposed a road map that would require adoption by all US publicly-held companies by 2014, 2015 or 2016, depending on the company’s size and filing status.

Accenture conducted a comprehensive survey in December of 2008 of large US companies on their plans for IFRS and four major themes emerged:

• IFRS will have a very broad impact on companies well outside of the finance function, including technology, business operations, external stakeholders, customers and human resources.
• Most companies view the move to IRFS as not just a compliance activity, but as an opportunity for broader transformational change within the finance function. This opportunity should not be missed given the relationship between finance mastery and high performance identified in Accenture High Performance Business research.
• CFOs are more likely to understand the impact IFRS will have on the enterprise as well as the potential IFRS has to drive a major change in the way the finance function does business.
• The impact of IFRS on enterprise performance management will be significant, which is prompting many companies to make substantial investments in key related processes and technologies.

There’s no question IT will be affected in a big way. Three-quarters of our respondents said they expected IFRS to add a lot of complexity to their ERP implementations or upgrades, as well as their implementation or upgrading of other technology solutions. A large majority of respondents thought IFRS would have a big impact on reporting and analytics systems, while more than half expect a significant impact on revenue systems, general accounting ledgers, tax applications, consolidation systems and projects and fixed assets systems.

Technology is critical. According to our survey, having information technology in place to support the conversion is most commonly seen as a key to the success of an IFRS initiative, a fact cited by just less than 60 percent of executives surveyed. Solutions such as those provided by Oracle can greatly facilitate the conversion while substantially reducing risk.

The Oracle Enterprise Performance Management solution, for instance, has core consolidation features that enable a company to consolidate under both US Generally Accepted Accounting Principles (GAAP) and IFRS simultaneously, with a very flexible rules engine that also includes topside adjustments and audit trails for making consolidation-level adjustments. It also includes dimensionality, which enables companies to track US GAAP versus IFRS adjustments, and document attachment capability, which enables companies to create an “electronic binder” of all adjustments as they are made. And it provides flexible reporting, which makes it easy to report and identify trends on both US GAAP and IFRS as well as reconcile differences by segment, account and geography.

It’s difficult to overstate the transformational aspect of this conversion. The broad reach of IFRS will provide companies with a rare chance to reevaluate and improve key elements of their business that are critical to organizations’ ability to achieve high performance.

For more information on how to get the most benefits out of the transition to IFRS, you can listen to CFO Magazine's free webcast featuring Troy Barton and me talking more about Accenture’s research findings, and read about Accenture's survey on accenture.com.