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Discussion Flow
Accounting and Reporting in Changing Environment Challenges in forward path Sustainability Management The Emerging Fourth Dimension of Reporting
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Global
Country
Entity Division
Convergence to IFRS
Countries that have already adopted IFRS are shaded with blue Countries in the process of adoption of IFRS are shaded in grey (Source. www.iasb.org)
No blackout period expected from IASB in transition course up to 2014 Substantial changes expected in Standards - Revenue, Consolidation Deferred Tax, Lease, Financial Liabilities Uncertainties about schedule in the USA albeit expected by 2014 / 15 Implementation challenges Scarce resources and IT solution Change in mindset of all concerned - Substance over Form
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Mandatory tests and measurements Covenant compliance Classification of Current liabilities Test of Going concern Fixed and Intangible Assets Componentisation Residual Life Impairment Take or pay arrangements Debt and Interest - in Preference Shares and Quasi Equity Instruments Modeling and valuation of Options and other Derivative contracts ERP System under new standards Automated process vs. Worksheets in excel with associated risks Handling of GAAP differences for conversion Annual Business Plan preparation under converged IFRS Standards Emerging needs of Direct Tax Code and Goods and Service Tax
Identify GAAP differences vis--vis IFRS List items to be done / redone with owners for each work group Transactions, Measurements, Disclosures, Sensitivity Table Assess requirements, efforts in-house capabilities and external support with Plan B if required Brief top management and operating team for support required
Identify a Mentor and set up a Steering Committee Prepare and monitor Action Taken Report Job description, Information inputs, Dependency, Timeline Review progress with focus for critical items Review draft accounts with iterative perfections
CFOs Questions
in Planning and Budgeting Process
What are the plans, action points, capital and revenue expenditure for Reducing material intensity Utility audit and reducing consumption of power, fuel, steam, water, etc. Optimisation and substitution of raw natural resources Minimising dispersion of toxic substances Green logistics for renewable and used products Recycling of scrap, wastage and spoilage Prolonging product life at minimum differential price
2007 China
India It is estimated that there are about fifty published reports now
Prominent Corporate Houses, who have published the reports so far are ITC, Jubilant Organosis, L&T, Mahindra, RIL,SAIL, SRF, Tata Motors, TCS, Tata Tea, Wipro (Illustrative list)
Learning Points
Sustainable development will be how the world will function The imperative is to ingrain Sustainability Management in corporate decision management process The clarion call is to monitor drivers and investments for sustainable value generation Reduce, reduce and reduce resource intensity for ultimate survival
Further thoughts
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Thank you