Publicly-quoted companies struggle to migrate to IFRS

Some publicly-quoted companies due to release their financial year-end results in the International Financial Reporting Standards format are struggling to migrate, our correspondent has gathered.

The Financial Reporting Council had issued a directive to all publicly-quoted companies to switch fully from the Nigerian Generally Accepted Accounting Principles to IFRS in their 2012 financial results.

Our correspondent, however, gathered that some companies were facing hitches in their transition to the IFRS, thereby delaying the release of their financial year end results for 2012.

Some of the problems being faced by the companies, according to investigation, include cost of transition, training and education, differences between local standards and IFRS and software problems.

Another challenge being faced by companies in adopting IFRS is that of changing accounting packages that are not compatible with IFRS and acquisition of new ones that can enable the implementation of the new reporting standard.

When contacted on the probable punishment the defaulting companies might face, the Chief Executive Officer/ Executive Secretary, FRC,  Jim Obazee, declined to comment.

However, the Chief Executive Officer, Dulex Finance Company, Chris Korie, said, “Converging to IFRS has a huge cost outlay, which include the cost of training personnel to understand the new global standards, cost of acquiring new accounting packages that are needed for the implementation, and cost of discarding former accounting packages that are not compatible with IFRS.”

The FRC recently said that under the recently adopted IFRS, late reporting of financial statements by organisations would attract appropriate sanctions.