Transformation, i.e. the transfer of financial reporting from national accounting standards applied in Ukraine to international financial reporting standards, also known as IFRS (International Financial Reporting Standards), is a difficult but crucial stage for many enterprises in strengthening their international reputation and access to international capital.
the first step is to determine to what extent current financial statements meet the requirements of IFRS. This involves the analysis of balance sheet items and accounting operations to clarify differences in methodological approaches to the recognition and subsequent accounting of the enterprise's assets and liabilities, as well as types and kinds of business transactions according to UAS and IFRS.
based on the results of the analysis, the volume of necessary transformations is identified, the accounting policies according to IFRS are agreed upon, accounting solutions are chosen between alternative approaches to accounting, the methodology for conducting relevant calculations, restatements and reclassifications, etc. is specified.
an analysis is made of how transformational restatements will affect the financial statements, financial indicators and taxation of the enterprise. Together with the expert, an action plan is developed for the consistent transition of financial reporting to IFRS
working with an IFRS expert is an excellent opportunity for an enterprise to receive qualified consultation recommendations on the optimal choice of accounting approaches for its transactions and to improve its personnel's knowledge and level of qualification.
as a rule, the ‘transitional’ period under IFRS is prepared on Excel files. After that, an entity shall implement accounting according to IFRS. Involving an expert will simplify the understanding of the process and scope of implementation of IFRS accounting.
Importance of transformation:
timely calculations of the impact of the transition to the application of IFRS will allow an entity to fulfil the laws' requirements and avoid tax risks.
using international standards to prepare financial statements makes financial statements more understandable and comparable for international investors. This creates an entity more attractive to investors and allows for raising global capital.
