I have some clients asking for studies that show the cost of conversion to IFRS for companies that have been through this. Does anyone know of resources for this?
This is a very difficult question to answer because there is no answer to it, in a single company, single operation not involving treasury activities (just plain cash and bank loans), cost of conversion are limited, maybe to only € 20,000.
In a multinational involving reporting entities all over the world and having significant treasury activities, resulting in all kinds of financial instruments en other implementation issues (such as level of accounting in certain countries/reporting entities) this can easily go into a few million Euro’s or US Dollars.
This is not much help but anyway
As pointed out by other list members, there is no easy answer to you question. To add something to that:
besides the ‘implementation costs’, you might also have accounting costs because of IFRS itself. What I mean is: costs that might be
activated/capitalised in the balance sheet in a current situation, might not be allowed to sit there under IFRS. Depending on the situation,
a change of accounting principles/methods used, might have a rather big impact on the statutory results of a company.
Understand, thanks. My client are more after the incremental cash costs
(professional fees, etc) of an IFRS conversion – as pointed out these will
vary greatly by company/industry.Gord