SMS Buenos Aires April 30, 2009 - Argentina New Developments on International Standards - IFRS Technical Resolution 26 – FACPCE Dated March 20, 2009 the FACPCE (Argentine Federation of Economic Sciences Professional Boards) approved Technical Resolution No. 26 “Adoption of the International Financial Reporting Standards of the Board” effective as from the years commenced after January 1st, 2011, not admitting an earlier application. This step concludes the first part of the process started in 2007, where a commission integrated by representatives from the CNV and the FACPCE submitted to the Board of Directors of the CNV a proposal for the adoption of the IFRS for the entities that make a public offering of their securities or bonds. In November 2008, the Board of Directors of the CNV had approved the reviewed implementation plan prepared by the FACPCE. If the compliance of the tentative schedule of the plan continues, by the end of April 2009 the adoption of technical resolution 26 by the Professional Boards of each jurisdiction would be pending as well as the adoption by the CNV by May 2009. It is also relevant that what was originally conceived as an exclusive project for the application of the IFRS in the financial statements of the entities making a public offering of their securities, became in fact in a more ambitious reality and today Technical Resolution No. 26 states that the IFRS optionally apply to all the entities non reached by the mandatory application (which application is subject to the approval of the control agencies: IGJ (Inspection of Corporations) –Public Commercial Registries of each jurisdiction. Technical resolution 26 explains that IFRS means the standards issued by the IASB in the official version in Spanish of such agency, the listing and date indication of the last version of which is attached as an Annex to the Technical Resolution No. 26, including: 1. Effective date and transition: The technical resolution provides for the application of the IFRS to the financial statements (those required by the IAS 1) corresponding to fiscal years that commence as from January 1st 2011 (and including it) and its comparative information (in the case of the financial position statement, three columns shall be submitted: as of the end of the current year, as of the end of the prior year and as of the date of transition to the IFRS, which is the opening financial position statement) and for those of intermediate periods corresponding to year 2011 (by applying IAS 34). For instance, an entity that closes its year on December 31 (65% of the entities listed at the stock exchange):
The impact of the migration to the IFRS goes beyond the accounting area and will result in changes in the entire organization that must be taken into account duly in advance. A) Prepare a working plan enabling them to reach the application time in adequate conditions. In this line, the proposals come from the implementation plan of the FACPCE’s Special Commission and the assembly of a schedule incorporating the requirements of technical resolution 26 is essential. B) Start with the adaptation of the accounting reporting systems to the new requirements. Professionals trained in the new standards in the financial area must interact with those who develop and update the accounting reporting systems in order to face the task on a joint basis and thus avoid the dispersion of efforts. The identification and evaluation of the accounting impacts must be adequately shown and disclosed within the company and towards third parties. Among the major challenges derived from the foregoing we see the training need as fundamental in order to undertake the necessary actions to implement the transition and dissemination to be made for the different interested parties. The entities affected are confronted with the need to start a strong training of their staff within the plans to be carried out, even in the middle of the current recessive context, with an appropriate monitoring. Footnotes: Read full article at: www.sms.com.ar |