Whether driven by an acquisition, organic growth, a listing in the U.S. capital markets, or another transformative event, a business may choose to transition from complying with International Financial Reporting Standards (IFRS) to U.S. Generally Accepted Accounting Principles (GAAP), or vice versa. The convergence of accounting standards has made adoption of a single methodology a more commonplace decision, albeit one with major and lasting ramifications for investors, corporate management, and other key stakeholders.
CohnReznick’s IFRS/GAAP Advisory team helps clients meet the challenges of a new era in accounting standards head-on, from assessing the impact of GAAP or IFRS adoption on their business, to conversion and implementation, to creation of financial statements and reporting using the chosen standards. We help clients prepare for the long-term impacts of the decision, including what it means for people and systems in other parts of the company that have a role to play in sustaining compliance.
CohnReznick’s Advisory team understands the broader impact of changes to accounting standards, which in many ways represent a significant transformational effort across existing policies, processes, and technology. Some of the key differences for companies to consider when transitioning between IFRS and U.S. GAAP include:
- Amortization of right-of-use assets for leases classified as operating under U.S. GAAP
- Certain inventory costing and valuation approaches
- Impairment allocation and testing approaches, methods, and measurement of intangible assets with indefinite lives, including goodwill
- Deferred tax assets, liabilities, and tax provisions are impacted depending on tax allocation methods and certain transactions
Some areas will require more in-depth evaluation depending on the complexity of a company’s debt and equity structure and the nature of their operations, and for such cases we work with the company to leverage an “Assess, Implement, and Monitor” approach.
CohnReznick’s end-to-end approach to GAAP/IFRS Advisory services helps clients with the decisions they make regarding adoption and implementation of a new financial standard framework. We offer an international pool of advisors with GAAP and IFRS expertise and decades of public reporting experience; but as fluency in the latest accounting rules is only as good as the practical advice it generates, we differentiate our services by making sure to complement our technical acumen with practical business insights.
Contact our team to learn more about our offerings, including:
- GAAP/IFRS assessments and insight into potential changes and financial statements
- Preparation of related accounting position papers
- Advice on complex accounting policy decisions
- Managing the messages to market
- Insight into impacts on your bottom line
- Post-implementation support