Financial Reporting Standards - Business...
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Financial Reporting Standards Business BARBADOS Barbados’ Premier Business & Investment Resource
Transcript of Financial Reporting Standards - Business...
FinancialReportingStandards
BusinessBARBADOSBarbados’ Premier Business & Investment Resource
KPMG is a global network of professional firms providing Audit,Tax and Advisory services. We operate in 150 countries and have138,000 people working in member firms around the world. Theindependent member firms of the KPMG network are affiliatedwith KPMG International Cooperative ("KPMG International"�), aSwiss entity. Each KPMG firm is a legally distinct and separateentity and describes itself as such.E-mail: [email protected]
he high profile corporate collapses in recentmemory and subsequent enhanced regulatoryscrutiny have, as expected, placed greater focus andemphasis on the whole area of Audit, Accountingand Financial Reporting. The professionals in thisarea are charged with being the ones who ensurethat a Company reports its results and financial
position in accordance with a recognized accounting framework andthat they are recorded truly and fairly.
Audit professionals are further charged with verifying thereasonableness of management's representations and reporting tothe shareholders. Professionals in this area are under intensepressure to "get it right". There is thus a need to stay at the forefrontof current knowledge. In the island of Barbados, the relevantprofessionals strive to provide the highest level of service and applyan appropriate level of scrutiny.
This section on Audit, Accounting and Financial Reporting givessome insight into the requirements in Barbados with respect to these.It specifically covers the following: Auditors - who can be an auditorof companies along with other pertinent information with regards toauditors Audit & Reporting Requirements - requirements to have anaudit performed and other regulatory filing requirements AuditReports - various forms of reports produced by auditors FinancialReporting Standards - the various reporting standards which can beapplied by companies.
Audit, Accounting & Reporting Requirements
Content Sponsor Introduction
This publication is an initiative of Business Barbados.
CreditsPublisher & Editor - Keith Miller, Peter BoosProject Management - Natasha Vlahakis, Nia VlahakisDesign - Neil Barnard at 809 Design Associates Inc.
Business Barbados is published annually by Caribbean Business Publications Inc.an initiative of:Miller Publishing Company Limited,Edgehill, St. Thomas, Barbados, West Indies. Tel: (246) 421 6700, Fax: (246) 421 6707E-mail: [email protected] www.businessbarbados.com
All information in this publication has been carefully collected and prepared, but it still remains subject to change and correction. Use these contents for general guidance only and seek extra assistance from a professional adviser with regard to any specific matters.
Copyright reserved. None of the contents in this publication can be reproduced or copied in any form without permission in writing from the publisher.
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Audit, Accounting & Reporting Requirements: Financial Reporting Standards
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International Financial Reporting Standards (‘IFRSs’) is theset of reporting standards, which have been adopted by theInstitute of Chartered Accountants of Barbados as the localGenerally Accepted Accounting Principles.
IFRSs are seen as a single set of high quality,understandable and enforceable global principles-basedstandards.
Currently over 100 countries use or permit IFRS or avariant of IFRS either for statutory or reporting purposes bypublicly listed companies or publicly accountable entities.In addition to this, many other countries are transitioningto a predominant IFRS framework in the near future (asearly as January 2011 and onwards to 2015) such asArgentina, Brazil, Canada, Chile, India, Japan and Korea.
Currently, the US Financial Accounting Standards Board(‘FASB’) and the International Accounting Standards Board(‘IASB’) are working towards a common objective. Thisobjective is to pursue the convergence of US GAAP andIFRS to further promote a single set of globally acceptedaccounting standards. In 2011, a decision is expected to bemade by the SEC on whether to incorporate IFRS into theUS financial reporting system for public companies.
As such, it is evident that IFRSs are the “way of the future”and in time it is expected that they will be fully adoptedthroughout the world. It is seen as a positive that Barbadoshas already adopted these standards.
Note that the International Accounting Standards Board(IASB) currently has projects under way which will have animpact on all companies which have either adopted IFRS orwill be adopting in the future. Some of these projectsinvolve changes to current standards, while others willresult in the issuing of a new standard.
IFRS for Small and Medium Sized Entities (‘SMEs’)
IFRS for SMEs was issued by the IASB on July 9, 2009. Itis a self-contained set of standards, incorporating
Financial ReportingStandards
accounting principles that are based on full IFRSs but thathave been simplified to suit the entities within its scope.These new set of standards are applicable to small andmedium sized entities which have no public accountability.It is up to individual jurisdictions to determine whichentities will be allowed to use this particular set ofstandards.
The Institute of Chartered Accountants of Barbados hasformally adopted these standards for use by companies asapplicable to their circumstances. It is expected that manyentities will take advantage of this and opt to use thesesimplified standards.
To provide further guidance on the applicability of IFRS forSMEs to entities, the SME Implementation Group inconjunction with the IASB has published for publiccomment a number of Q&A’s on various topical matters.The topics and links to the Q&As are as follows:
• Applicability of IFRS for SME in a parent’s separate financial statements where the consolidated statementswere prepared using full IFRS
• Applicability of IFRS for SME in the parent of a captive insurance company’s consolidated financial statements and in the separate financial statements of the captive insurance company
• Applicability of IFRS for SME to Investment Funds with only a few participants
• The interpretation of ‘traded in a public market’
Other Standards
All entities doing business in Barbados do not use IFRSs.For various reasons, many entities registered in Barbadosreport in accordance with another set of standards. Morecommon ones are Canadian, UK, or US Generally AcceptedAccounting Principles. In such cases, the local subsidiary isusually applying the same reporting framework as its
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parent company to allow for easier consolidation of resultsat the head office level.
However, as was noted earlier, more countries are movingtowards a predominant IFRS framework and as such, in thefuture it is expected that all companies will be using theseaccounting standards.
Canadian Publicly Accountable Entities
It is now mandatory for all Canadian publicly accountableenterprises to use IFRS.
For most Canadian publicly accountable enterprises,January 1, 2010 began the transition year in their move tothis new accounting language. An IFRS opening balancesheet was required to be prepared as at January 1, 2010,with December 31, 2010 being the last date for whichCanadian GAAP financial statements could be prepared.The first annual financial statements in accordance withIFRS are required to be prepared as at December 31, 2011.The first interim IFRS financial statements withcomparatives are required to be prepared for Q1 2011.
Canadian Private Entities
On December 15, 2009, the Canadian AccountingStandards Board released the final version of theAccounting Standards for Private Enterprises (‘AsPE’).These are effective for fiscal periods beginning on or afterJanuary 1, 2011, with earlier adoption permitted.
Currently there are no plans to adopt IFRS for SMEs inCanada in the foreseeable future and as such the AsPEwhich are based on existing Canadian GAAP, represent the“made in Canada� solution to provide a set ofsimplified accounting standards which can be used byprivate for profit enterprises. There is no size test for thesestandards and as such they can be applied by all privateenterprises once they have no public accountability.
With the introduction of these standards, effective no laterthan for periods beginning on or after January 1, 2011,Canadian private enterprises that produce general purposefinancial statements need to make the decision on whetherthey will adopt the AsPE or IFRS.
Based on the above events, it is expected that entitiesoperating in Barbados which are subsidiaries of Canadianentities will see a change in the applicable reportingframework.
Audit, Accounting & Reporting Requirements: Financial Reporting Standards
