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Structured Approach
People and change
• Skills of individuals • Training strategy • Change to roles and
responsibilities • Project interdependencies
Business
• Contracts and Agreements • Communication to financial
markets • Customer and supplier
relationships • Budget and management
reporting
Systems and processes
• General ledger and sub ledgers • Data collection • Impact on ERP system • Reporting package and
consolidation
Accounting, tax and reporting
• Accounting differences • Reporting differences • Effect on statutory reporting • Effect on regulatory reporting
Passionate and skilled team
Khalil AlSedais
Partner
Head of Audit KSA
Member Technical Committee, SOCPA
Jamil Kahtri
Partner, India
KPMG Global Head for IFRS Convergence
Khalid Yasin
Senior Director
Head Risk Consulting Accounting
Advisory Service
IFRS
CONVERGENCE
SERVICES
KPMG Leadership
Engagement Leader
Kashif Zafar
Senior Director
0551525918
Your Primary Contact
Partnering your road to
transition….
©2015 KPMG Al Fozan & Al Sadhan, a partnership registered in Saudi Arabia, and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity.The KPMG name is registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
*IFRS 15 implementation issues 2015
Why KPMG ??How convergence may impact you?Convergence of Local
GAAP to IFRS
The need for transition:
In the wake of emerging and ever-developing
accounting and financial reporting landscape,
together with the global acceptance of the
International Financial Reporting Standards (IFRS), it
has recently been decided by SOCPA to commence
a project for reviewing and assessing existing
SOCPA standards in light of the relevant IFRS. The
fact that KSA was the only country within G20 with
neither IFRS adoption nor a road-map to conversion.
The conversion project:
Consequently, a road map for convergence was
developed with an emphasis that due consideration
should be given to environmental factors and
economic conditions in Saudi Arabia, and that
transition should be applied ensuring sufficient time
to all stakeholders to get themselves professionally
and technically ready for smoother transition.
In accordance with the approved convergence plan, all
Saudi Listed Entities are required to adopt IFRS for
financial periods commencing on or after January 1,
2017 and other companies will follow the convergence
in the following year.
Assess
Impact of
conversion
Discuss results of
initial assessment
of impact
Update
qualitative
discussion
Start
first
IFRS
year
First IFRS
A/R
Financial
statements
First
Interim
Financials
on IFRS
Refine and
monitor IFRS
reporting process
31/12/17
Reporting
Date
Design
&Implementation of
conversionHold
educational/
informational
discussions
regarding
IFRS with
management
Parallel
processing
under IFRS and
SOCPA
Comparative year on IFRS
basis Year of Adoption
01/01/2016
Transition Date
– preparation
of consolidated
IFRS opening
balance sheet
IFRS 1 : First
Time Adoption
Standards
*A/R – annual report
** Companies would need to start preparing IFRS
Interim financial statements in Q1 2016 in order to
have comparative figures for the 2017 financials. In
2016, companies would still issue SOCPA interim
financial statements for Q1 through Q3.
Key assumptions in timeline estimate:
Impact assessment : 3-6 months (based on scale and
complexities in business)
Discussion of impact assessment results : 1-3 months
IT System changes: 3-6 months
Opening balance sheet preparation : 2-3 months
31 Dec 2017
2017 A/R *2016 A/R *
31 Mar 201731 Dec 201630 Jun 201631 Dec 20151 Sept 2015
Dry run
conversion for
2016 IFRS
comparative
info.
Our existing clients
Critical
Success
Factors
Comprehensive Project – Accounting,
Business, IT
Policy election & IFRS 1
Transfer of Knowledge to Internal Team
Involvement of Senior Management at periodic intervals
Involvement of teams from different geographies
Right project management office –
Auditor, IFRS Team etc
Imparting technical training to resources
Consider bandwidth of internal teams
Coverage of all material locations
for assessment
Top management sponsorship of the
project
Starting Early
How KPMG can help?- Analyzing and identifying the differences
between the current accounting policies and
practices and the requirements of IFRS (GAAP
analysis).
- Convergence with IFRS requires changes not
only in accounting but also other areas of the
organization such as IT systems and business
processes. Our scope includes identifying the
impact of IFRS convergence on such other
areas of the organization as well.
- Convergence with IFRS also impacts people
and has consequences for change-
management with in organization. Our scope
includes identifying the skills need of the
group and also conducting the awareness
sessions.
- Highlight key accounting issues and any
potential 'surprises’.
- Review the opening balance sheet and
financial statements prepared by the
management and provide our observations and
recommendations on the same.
- Providing generic examples of financial
statements and footnote disclosures, including
KPMG’s publications on illustrative financial
statements.
Consolidation – A
New “Control” approach
Financing
Arrangements
Financial instruments – Fair
value accounting
Revenue recognition
Employee Benefits
Key Timelines and Deliverables
Property plant
Revaluation accounting
Hedging
Related Party Transitions
Acquisitions and discontinued
operations
Segment reporting
Lease Arrangements
Intangible Assets
Provisions, contingent
liabilities and assets
Impairment of financial
and non-financial assets
Risk Management
Disclosures
Critical Success Factors for a smooth convergence
- Sanofi Aventis
- Ruchi
- ING
- Centrica
- Korea Telecom
- Arima communications
- BMW
- LBB
- Bezea
- Gen Re
- Kt