This question was asked during the Proformative
How will companies best manage risk with regards to GAAP/IFRS convergence? (Webinar Attendee Question)
Answers
There are a lot of "strategic choices" that companies can make when transitioning to IFRS to make their balance sheets look stronger. Most of these changes result from application of IFRS 1, that is the standard applied to prepare the first balance sheet for conversion to IFRS.
For example, some of these choices will allow you to take the unrealized losses through equity on transitioning to IFRS, i.e. the unrealized losses will not flow through the income statement ever in the future. In other words it will boost up your future net income.
However, when you move to IFRS, there is no impact on cash, just the
It is a pretty complex topic for which you might need to do some reading before you start looking at the strategic choices that will be applicable to your business.
Kind regards,
Sunil Thukral,
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