Ernst & Young zeroes in on IFRS for human resources departments



    TORONTO, Sept. 11 /CNW/ - Human resources professionals need to pay close
attention to the ways International Financial Reporting Standards (IFRS) will
affect compensation plans, training and retention of key resources, Ernst &
Young says.
    "With IFRS conversion slated for January 2011, it's time to start
thinking about these crucial issues now," says Bruce Sprague, Ernst & Young
Human Capital Partner. "In many business sectors, IFRS will change earnings,
earnings per share and financial position; which will impact the entire
organization."
    Incentive thresholds might be met (or become unachievable) as a result of
IFRS adoption simply because reported metrics could change, including those
used for incentive compensation thresholds such as income, revenue and net
asset value.
    So, where should human resources start? Ernst & Young suggests the
following five key areas to help HR professionals get going on IFRS.

    
    1.  Compensation committees will need to work closely with accounting and
        management functions to understand the new processes' potential
        impact on remuneration.

    2.  A shortage of trained IFRS resources is another significant challenge
        companies will face. Since comparative data will be required as early
        as 2010, companies need to act now. Does your organization have
        enough manpower to handle IFRS conversion? Numerous areas of the
        company, including information technology, may need additional people
        on hand, especially over the next few years. And IT specialists are
        already at a premium in Canada, especially those who understand
        accounting implications.

    3.  The next generation of accountants and finance specialists will need
        to speak fluent IFRS. Universities are adapting their curriculum -
        but are companies offering the training required? It's time to start
        integrating IFRS seminars and professional development into the
        finance departments of Canadian companies.

    4.  Human resources committees might also want to develop succession
        plans for key IFRS-trained technical resources, and revisit the
        company's compensation strategy. This could help reduce the risk of
        losing key finance people.

    5.  Last but not least - human resources should be working with their
        communications counterparts to ensure any HR changes resulting from
        IFRS get the talk time they need now, and that everyone understands
        what's happening, and why.
    

    The new standards are quickly becoming the reporting benchmark in many
parts of the world. To date, more than 100 countries either require or permit
the use of IFRS, including Canada. It's a major change management project that
can reach into all corners of a business. The best advice regarding the timing
of the conversion project is to start as early as possible.

    About Ernst & Young

    Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 130,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
helping our people, our clients and our wider communities achieve potential.
For more information please visit ey.com/ca.





For further information:

For further information: To learn more about what human resources teams
need to do now to prepare for IFRS conversion, please contact: Amanda Olliver,
amanda.olliver@ca.ey.com, (416) 943-7121


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