When do you think the conversion process should start?
Manager 1: The conversion process from GAAP to IFRS will be a big challenge. There are a lot of differences between the two standards and thus it is expected to take at least 2 years for the conversion process. It is thus very important to start planning for the change right away.
Manager 2: With our firm having global operations, we would need to start making the change much before the other companies, which have operations only in the US.
Analysis: There is no standard formula to say how much time and effort the entire conversion process will take. The extent of impact and the change would vary from company to company and sector to sector. The extent of change would also depend on the size of the organization. However, whatever industry or size of organization we are talking about, it is no doubt going to be very challenging. It is thus important for companies to start planning the transition early. Firstly the companies need to conduct a diagnostic review to understand the kind of impact IFRS will have on them. This would give them an understanding of the kind of the kind of changes that would be required and the amount of time these changes would take.
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