Governance Focus: Inside IFRS - The opportunity for energy IT

A major move
Conversion to International Financial Reporting Standards (IFRS) will likely be the largest single change of accounting policies and procedures ever undertaken by US companies. The move to IFRS may compel companies to make significant changes in business processes and supporting systems beyond the finance function. While the proposed timelines for IFRS adoption appear to be far away and not urgent, there are many reasons for energy companies to begin planning now.

While accounting considerations are the primary drivers of IFRS conversion, information technology (IT) departments must participate in project planning to provide insight around the technical implications of key decisions. Some energy companies may face significant information system implications, while others may find that systems do not require major rework. But there is simply no way to know the extent of effort required unless the IT organization devotes attention to this question. Consequently, the company that does not devote the effort now to analyze their organization’s specific conversion requirements for time, people, processes and systems, could be caught unprepared and have fewer options than those companies that planned ahead.