Expert Video Feedback from Arnold Tholstadt:

According to another blog on BFFB, Arnold Hanish, the vice president of finance at Eli Lilly, says that the biggest concern for finance professionals is the current uncertainty surrounding a hard adoption date: “Remove that uncertainty,” he urges, “because it will take large, global companies at least two years to prepare for conversion.” We strongly agree!

Read Deloitte’s D.J. Gannon’s response below (also, see D.J.’s video here):

Arnold, you’re not alone. One of the key issues of commentary on the SEC’s road map is the need for certainty around the timing of adoption.

In a recent Deloitte & Touche LLP survey of finance professionals, 62 percent of respondents believe that the SEC should soon establish a “date certain” for mandatory IFRS adoption in the United States. There also have been a number of comments on the timeline for mandatory adoption of IFRS, and specifically the need for allowing companies sufficient time between when the SEC decides to require IFRS and the date of transition (i.e., opening balance sheet date). A calendar year-end company that would be required to adopt in their 2014 financial statements, for example, would need to begin accounting under IFRS as of January 1, 2012 – their date of transition. My experience has been that most companies need between 18 and 24 months before the date of transition in order to provide for an efficient and effective transition.

Tara Young says:

As a large multinational, we are now estimating our current conversion appraoch to take no less than 30 months — with the modification of our systems presenting the greatest challenge.

Deloitte’s D.J. Gannon responds:

Tara, for many large, multinational companies, it can take 24–36 months to fully convert to IFRS, with systems often being a time-consuming component. Common areas that often require system changes are R&D, fixed assets, inventory, dual reporting (general ledger, subledgers, and consolidations), and internal management systems for planning, forecasting, and budgeting.

To make the eventual transition to IFRS less burdensome, we suggest that our clients consider IFRS requirements when modifying, upgrading, or implementing new systems or financial modules. Companies may also consider using some predeveloped IFRS solutions to attempt to streamline the changes required to financial systems. ###