Our Services
IFRS conversions
Companies that convert their financial statements to IFRS from local GAAP are affected to different extents. Some companies have small quantitative effects and few areas that are affected while others are affected to a larger degree.
For all companies, it is important to document the impact analysis that identifies which areas are affected and those which are not, both for internal purposes and as a basis for the auditor’s review of the IFRS conversion. Regardless of quantitative impact, preparing financial statements in accordance with IFRS requires all companies to present more extensive disclosures compared to Swedish GAAP.
Further, applying IFRS requires IFRS competency within the accounting department, the allocation of sufficient time and resources, and that the high impact areas requiring further investigation are identified at an early stage of the process. Typical areas of impact include the recognition of most lease contracts on the balance sheet, that goodwill is not amortized, restatement of purchase price allocations, and that qualifying financial instruments shall be measured at fair value.
At Fenix Advisory, we have extensive experience of supporting clients with IFRS conversions. We tailor company-specific solutions and can take project lead or be a sounding board with which to discuss specific issues, based on your prerequisites. Since we are independent from audit firms, we can support clients through the whole conversion process; from impact analysis to calculating quantitative effects and implementation. The following bullets describe a typical conversion project.
Project structure IFRS conversion
- Usually starts with the preparation of an impact analysis in which all areas that may be affected are analyzed and documented
- Deep-dive into, and documentation (including potential quantification) of, the high impact areas
- Preparing annual and interim reports including disclosures, accounting policies and a bridge note between previous accounting principles (typically Swedish GAAP K3) to IFRS
At Fenix Advisory, we assist you to the desired degree, ranging from establishing a project structure and provide support throughout the process to completing the whole IFRS conversion with a minimum of input from you. Everything we do is entirely based on your needs.
We can also provide training for your employees and help with the procurement of systems such as lease calculation tools or map the IFRS annual report template against the chart of accounts of the group companies.
Initial public offerings (IPOs)
To list shares or debt instruments on a stock exchange or MTF is normally a major step for companies and associated with many new rules, routines and processes. In connection with many IPOs, the issuer is required, or expected, to prepare its consolidated financial statements in accordance with IFRS.
To change accounting policies from Swedish GAAP to IFRS is often one of the most time consuming preparations pre IPO. Finalized IFRS figures need to be available well in advance of a planned IPO which means that it is preferred to initiate the GAAP conversion at least one, but preferably two, years ahead of the IPO. Sometimes, however, this is not possible due to the planned IPO date. In such cases, the GAAP conversion may be finalized in parallel with other IPO preparations, which then requires a more intensive work effort.
We have extensive experience of supporting companies convert to IFRS and can aid throughout the entire projects, e.g. with:
- Analyzing GAAP differences between legacy GAAP and IFRS,
- Implementing changed accounting policies,
- Preparation of annual and interim reports in accordance with IFRS,
- Financial information to be included in prospectus, and
- Preparation or update of an accounting manual.
When planning an IFRS conversion, it is important to remember that the auditor should review and approve the application which requires documentation of all steps, decisions and positions taken. In connection with an IPO on a regulated market, a stock exchange auditor will also be required to approve of the IFRS application. The right experience and methodology are key success factors for a successful project!
Company mergers, acquisitions and divestments (M&A)
To acquire or divest a company are often major and important transactions. As each individual transaction is unique, and small details may lead to material, and sometimes unwanted, accounting effects, it is crucial to analyze the accounting effects thoroughly ahead of each transaction.
Under certain circumstances, companies are required to provide additional information to stakeholders in connection with acquisitions, for example through the preparation of pro forma accounts. We have extensive experience of analyzing the accounting effects of acquisitions and disposals, both from an IFRS and Swedish GAAP perspective, and we can, therefore, help you identify and evaluate the critical accounting issues. If you are required to prepare pro forma accounts, we may prepare the accounts for you, or in collaboration with you.
The work and challenges for the finance department continues post the completion of the transaction. As an example, it is often required to adapt the acquired company’s accounting policies to the acquirer’s accounting policies. Further, the acquirer is required to provide disclosures of the acquisition’s effects in the consolidated financial statements. We will support you in onboarding new companies into the Group and evaluate their effects on the financial statements.
Temporary resources
in connection with complex accounting events
Sometimes companies are simply in need of a few extra hands. We support full- or part-time in connection with complex or time consuming projects, such as an IFRS conversion or company acquisition.
Since we work as a team, and have extensive experience from these types of issues, we will minimize the time required for ordinary personnel to handle these extraordinary events.
New accounting issues
Companies constantly face new accounting issues, either as a result of external events such as new rules or interpretations, or due to new types of transactions or events within the company.
From experience we know that the ingenuity of companies often is large when it comes to for example new revenue streams, partnership agreements, benefits and acquisition of assets. Regardless if you need help in analyzing new revenue streams, new or amended lease contracts, renegotiated loans, etc., we have the experience required to provide you with a clear and effective support.
Discussion partner for accounting and reporting issues
Most of the time you will get very far in solving an accounting question on your own, but sometimes you need someone to discuss with.
We gladly provide you with our perspectives and thoughts so that you feel comfortable with your solution to the identified issue.
Training of the finance department
Training of the finance department
Irrespective of whether the company converted to IFRS recently or several years ago, the finance department may need an update of the standards due to the complexity of the accounting framework.
We can support you with a company specific lecture or workshop which we base on the company’s business and its related issues. Consequently, we will train your personnel in the issues that they actually experience within their day-to-day work.