The impact of International Financial Reporting Standards to European companies

1. Introduction Companies around the world are facing one of the biggest-ever change in financial reporting. In Europe, from 2005 there is the requirement to publish consolidated financial statements prepared in accordance with international standards, instead of the old national accounting rules. 2. The main issues facing companies in making the transition to IFRS The preparation of IFRS-based financial statements needs careful planning and good change management. Apart from the technical issues there is the need of Training &…

…smoothly amortize goodwill over time. This as also tax implications as the actual tax relief for amortization of goodwill will not therefore be available for companies adopting IFRS. IFRS 22 requires immediate recognition of negative goodwill in some circumstances and this may give rise to a tax charge where the negative goodwill relates to intangibles. 6. Bibliography Accountancy Age (www.accountancyage.com) Delloite (www.iasplus.com) International Accounting Standards Boards (www.iasb.org) PriceWaterHouseCoopers (www.pwcglobal.com)