Based on experience from various Standards adoption projects, Neoris has developed a Methodology of Adoption that includes the following phases:

Phase 1: Preliminary Accounting Study

This phase includes the evaluation of the individual elements of the financial statements and an asssessment from an accounting and auditing points of view in order to identify the differences between the company’s current financial standards and the new Standards. A thorough analysis of the impact of adopting the new Standards must also be completed as well as an analysis of possible administrative changes that would enable reducing the impact on calculations and results. In addition, the company should review its different options within the IFRS and the transition dates.
The company must partner with an auditing firm in order to complete this phase.

Phase 2: Preliminary Technological Study

Once the company has identified the Standards that apply to its business, a technical and information technology assessment must be done. This assesment must include an analysis of the resources that will be necessary to carry out the transition.
In this phase, a consulting services company must be selected in order to analyze the technical and technological requirements and provide a blueprint for the migration.

Phase 3: Start of the Project

The company initiates the adoption of the new Standards by switching accounts and setting up a parallel accounting system. During this phase, the processes’ reingeneering process must be initiated to facilitate the adoption and the change management strategy must be put in place to guarantee the continuity of the company’s operations.
Additonally, user manuals for the new procedures must be prepared and internal controls revised and/or established. The company’s operations personnel and executives must be trained and acquainted with the implications of the change.

Phase 4: Project Implementation

Finally, in this phase, the full implementation of the new Standards takes place as the only guideline for financial reporting. In addition, new control points must be established.

To ensure a successful adoption, Neoris highlights the importance of the support from top management to guarantee a smooth implementation of the project and the relevance of a strategic change management plan. In addition, communication, teamwork and the transfer of key know-how are imperative in order to guarantee a successful adoption of the rules and the continuity of the operations during and after the adoption of the Standards.

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