Monday, 11 March 2013

Prepare for IFRS, Council Urges SMEs

By Obinna Chima

The Financial Reporting Council (FRC) has advised Small and Medium Scale Enterprises (SMEs) operating in the country to get ready for the adoption of the International Financial Reporting Standards (IFRS) from December 31, 2014.

The council also urged Chief Executive Officers (CEOs) of companies in the country to invest in the education of their employees on the recently adopted international accounting standard, so as to enhance accountability.
CEO/Executive Secretary, FRC, Mr Jim Obazee, gave this advice during an executive briefing on IFRS for CEOs and top management of companies in Lagos.

He identified IFRS as an important plank in global financial reporting, stating that local accounting standards are no longer adequate for the financial system.

“In recent times a number of Nigerian companies have raised capital from international stock markets; others have established significant presence in other jurisdictions. Also a good number of Nigerian entities hold the securities of non-Nigerian issuers.
Therefore, for a better understanding and appreciation of the risks and consequently making decisions about the flow of economic capital, it makes sense that financial statements prepared in Nigeria use these global financial reporting benchmarks”, he declared.
Obazee therefore encouraged the CEOs and top management staff of companies to make use of the facilities provided by the FRC in broadening knowledge of IFRS

According to him, the roadmap for adoption of IFRS in Nigeria specifies that publicly listed entities and significant public interest entities are to prepare their financial statements using applicable IFRS by January 1, 2012 while other public interest entities are expected to mandatorily adopt IFRS for statutory purposes by January 1, 2013.

Presenting a paper on the tax implication of adoption of IFRS, a consultant on taxation and accounting issues, Mr Taiwo Oyedele of Price waterhouse Coopers advocates amendment of tax legislation in order to facilitate adoption of IFRS.
He said such rule changes will guard against companies suffering unbudgeted tax liabilities and the government incurring shortfall in its tax revenues.
Source: ThisDayLive

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