Interview Opportunity - Challenges and opportunities abound when oil and gas companies meet IFRS



    TORONTO, Jan. 29 /CNW/ -

    
    What:  Canada's energy industry has had to deal with significant change
           in recent years - from a new royalty regime and evolving domestic
           and international tax rules to regulatory pressure to improve
           internal controls. Now the sector faces a new challenge - adopting
           International Financial Reporting Standards (IFRS) as the new
           Canadian GAAP.

           IFRS is often called a global accounting language. It's designed
           to help make global financial reporting clearer by ensuring
           companies around the world tell their financial stories in a
           consistent, directly comparable way. IFRS will pose a new
           challenge to an industry that already lacks definitive accounting
           guidance. What's more, it will have implications for Calgary's
           already tight labour market.

    Why:   Canada is set to adopt IFRS as the new Canadian GAAP for all
           publicly accountable enterprises in 2011. Ernst & Young urges
           those companies to start planning their conversion process now,
           since they are required to publicly disclose the anticipated
           impact of conversion on their business at the end of calendar
           2008.

           Ernst & Young believes the energy industry will face some
           accounting challenges with the switch to IFRS. No authoritative
           set of accounting standards addresses oil exploration, development
           and production in Canada, and the application of existing guidance
           can be ambiguous. The coming of IFRS raises new questions: Will
           IFRS address operations accounting for the oil and gas industry?
           Will it follow existing mining practices?

           As well, Ernst & Young anticipates that a shortage of people
           trained in IFRS will be a significant challenge in Calgary's
           energy industry, and urges management to make addressing this
           skills gap an immediate priority. IFRS-trained people will be in
           very high demand, so human resources committees will need to
           develop succession plans and develop compensation packages to
           retain those valuable people and mitigate the risks of losing
           them.

    How:   In the months ahead, management teams need to:
           -  Get a clear understanding of the anticipated financial
              statement, IT and business impact of IFRS
           -  Build an IFRS conversion plan that makes effective use of
              available resources while controlling costs
           -  Establish leading practices around project management
           -  Plan for and secure the appropriate resources in Alberta's
              tight labour market.

    Who:   Ernst & Young has significant global experience in helping
           companies address the IFRS conversion challenge as well as
           extensive experience helping energy companies in Canada and around
           the world address the issues unique to their business. Ernst &
           Young can help companies understand the impact of IFRS on their
           business and help them develop an effective conversion plan.
    

    Ernst & Young, a global leader in professional services, is committed to
restoring the public's trust in professional services firms and in the quality
of financial reporting. Its 114,000 people in 140 countries pursue the highest
levels of integrity, quality and professionalism in providing a range of
sophisticated services centred on our core competencies of auditing,
accounting, tax and transactions. Further information about Ernst & Young and
its approach to a variety of business issues can be found at
ey.com/perspectives. Ernst & Young refers to the global organization of member
firms of Ernst & Young Global Limited, each of which is a separate legal
entity. Ernst & Young Global Limited does not provide services to clients.





For further information:

For further information: or to speak to an Ernst & Young spokesperson,
please contact: Megan Bailey at (403) 206-5037 or megan.bailey@ca.ey.com or:
Kelly Peace at (416) 943-3662 or kelly.peace@ca.ey.com


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