Proceedings

� introduction of basic principles on which IFRS are based to all people in
charge with the adoption (not only company’s accountants and
management, but also IT specialists, tax specialists, etc.);
� overview of current accounting software and other information systems.
• The analysis of local GAAP:
� identification of general differences between national GAAP and the IFRS;
� identification of differences between entity’s accounting politics under
national GAAP and the IFRS;
� list of all differences, which will be subject of conversion, structured in
following groups: applied under both systems, but applying different
accounting methods; applied only in local GAAP, but not under IFRS;
applied only in the IFRS, but not under local GAAP.
• The accounting choices:
� measurement bases used in IFRS statements;
� accounting politics, incl. useful lives for non-current assets, level of
significance, etc.;
� usually defined by the parent company in order to hold uniform
consolidation politics.
• The formulation of data needed for the conversion:
� design of a “conversion bridge”, which will be used for the conversion
(usually usage of spreadsheets);
� definition of outputs from current accounting SW needed for the conversion
(e.g. accounts receivable datasets with amounts and due dates);
� definition of external inputs (e.g. interest rates for discounting of long-term
receivables and payables, etc.).
• The creation of a “conversion bridge”:
� reclassification of items (usually between non-current and current);
� remeasurement of accounting elements, when different measurement bases
are applied under local GAAP and the IFRS;
� elimination of items recognised only under local GAAP (e.g. certain kinds
of provisions, capitalised establishment costs, etc.);
� recognition of items required by the IFRS and not applied under local
GAAP (e.g. finance leases assets and liabilities);
� recognition of items required by IFRS 3 if a subsidiary was acquired within
business combination;
� calculation of all amounts relating to the conversion incl. deferred tax.
• The preparation of financial statements and other information:
� usually according to the template designed by a parent company.
• The implementation of opening balance into accounting SW or other IS:
� relevant only if dual accounting system will be used for keeping accounts
(more details in next subchapter).
The implementation of outputs and figures calculated within the conversion of
financial statements is a process, which requires a lot of time. If an entity does not
possess accounting software enabling parallel (dual) keeping of accounts under
different set of accounting standards, implementation of a new information system or
reengineering of the current software is needed. This is a timely and costly issue.
Therefore many entities select other technical solutions, which will be used for the
conversion of financial statements in subsequent periods.
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