Conversion to International Financial Reporting Standards can pose many challenges for companies, ranging from identifying and implementing changes in accounting policies and IT systems to developing internal and external communications strategies for the new basis of accounting, and considering what impact revised measures of performance and net assets might have on regulatory requirements, bank covenants and dividend payouts. The International Accounting Standards Board provided significant guidance on how to convert from current national generally accepted accounting principles ('previous GAAP') to IFRS in its first new standard, IFRS 1, First-time Adoption of International Financial Reporting Standards. It is also finalising a'stable platform' of standards for adoption in 2005, and the board has committed to publishing all 2005 standards by March. As the clock ticks down to 2005, preparing for IFRSs becomes a critical shareholder communication issue for all companies impacted by the EU IFRS regulation.
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