KPMG Armenia develops global methodology for overcoming difficulties in conversion to IFRS

ЕРЕВАН, 23 июня. /АРКА/. KPMG Armenia has developed a global methodology which presents a structured approach to the conversion which is designed to assist clients to convert to IFRS in the shortest possible time and without incurring additional expenses, the audit company reported on Tuesday.

The company has worked out the methodology to help businesses meet IFRS conversion challenges.

“Harmonization of financial reporting of Armenian listed companies with those around the world will help to raise confidence of international investors who seek to obtain comprehensive, transparent and understandable information for their decision-making purposes. For non-listed medium to large scale companies, having financial statements prepared under IFRS means being better prepared to “go public” via an Initial Public Offering (“IPO”) should companies have the need for more capital or if existing shareholders wish to divest”, the press release says.

The transition brings certain benefits to Armenia. Adopting IFRS will result in reduced costs for those financial organizations and listed companies which were required to report both under IFRS and ASRA by eliminating the double reporting requirement. The greater confidence in reliable and transparent information will also translate into a lower cost of capital, primarily in reduced interest costs.

“Many leading Armenian companies have already converted or are in the process of conversion to IFRS.

Companies who have started the transition process, have already gained a number of benefits, the most important of which is that IFRS reporting really enhances the effectiveness of the company’s management and decision making process since IFRS principles provide better decision-making aids to management because they are more oriented to a realistic reflection of economic efficiency, the press release said.

“On the other hand, the new Law brings a number of challenges for Armenian companies in the process of transition to IFRS.

IFRS adoption means undergoing major changes as Armenian companies predominantly align their accounting and reporting practices to comply solely with the Armenian tax legislation requirements which usually give rise to significant differences in the accounting treatments with those under IFRS”, the release says.

To help businesses meet IFRS conversion challenges, KPMG has developed a global methodology which presents a structured approach to the conversion.

KPMG was the first large international audit and consulting company to open its office in and get a license for providing audit services to banks and enterprises.

In 1995, the company started conducting up-to-international-standards financial audit in Armenia. -0---