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 &
"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
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
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
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.
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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,
firstname.lastname@example.org, (416) 943-7121