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ADOPTING AND IMPLEMENTATING IFRS: BENEFITS AND CHALLENGES

ADOPTING AND IMPLEMENTATING IFRS: BENEFITS AND CHALLENGES. PRESENTED BY: PATRICK NG TSEUNG CHAIRMAN OF MAURITIUS INSTITUTE OF PROFESSIONAL ACCOUNTANTS. IFRS IMPLEMENTATION IN MAURITIUS. IFRS became mandatory in Mauritius in 2001 through the legislation of the Mauritius Companies Act 2001;

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ADOPTING AND IMPLEMENTATING IFRS: BENEFITS AND CHALLENGES

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  1. ADOPTING AND IMPLEMENTATING IFRS: BENEFITS AND CHALLENGES PRESENTED BY: PATRICK NG TSEUNG CHAIRMAN OF MAURITIUS INSTITUTE OF PROFESSIONAL ACCOUNTANTS

  2. IFRS IMPLEMENTATION IN MAURITIUS IFRS became mandatory in Mauritius in 2001 through the legislation of the Mauritius Companies Act 2001; All companies have to prepare financial statements in accordance with IFRS except for small private companies as defined under the Companies Act; Prior to 2001, Companies were reporting under the Mauritius Accounting Standards.

  3. IFRS adoption and implementation: Benefits • Increases credibility of our financial sector: • Promotes Mauritius as a credible financial centre; • Significant increase in foreign direct investment and capital flows through Mauritius. • Most recognised financial reporting framework across the world increasing credibility and reliability of financial statements especially in cross-border transactions; • Comparability of financial statements at both national and international levels; • Easy access to technical support given the widespread adoption around the world;

  4. IFRS adoption and implementation: Benefits (continued) • Career mobility of accounting professionals; • Extensive disclosures useful for a wide variety of stakeholders including shareholders, lenders, regulators, customers, suppliers, etc; • Improves quality of information necessary for management decisions.

  5. IFRS adoption and implementation: Challenges • Lack of knowledge and skills especially in first few years – often giving rise to improper application of the standards and interpretation issues; • Companies are often not geared in terms of systems and processes to meet the extensive information and data requirements of the different standards; • IFRS often requires significant judgments and estimates e.g fair values, provisions, impairment, etc.; • Companies must get ready for first time adoption of IFRS well in advance of their first IFRS financial statements – e.g comparatives, transition provisions, etc.

  6. IFRS adoption and implementation: Challenges (continued) Where IFRS differs largely from existing GAAPs e.g in terms of recognition and measurement criteria of assets and liabilities, the opening IFRS financial statements can be significantly different resulting sometimes in solvency issues for certain companies; IFRS sometimes does not take into consideration local context and sometimes local adaptation is required e.g protected cell companies in Mauritius; IFRS sometimes conflicts with local regulations e.g Banking Act; In smaller countries like Mauritius, IFRS financial statements are often seen as overloaded with irrelevant information for stakeholders - Cost Vs Benefits?

  7. IFRS adoption and implementation Thank you

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