Process of Implementation of International Financial Standards (IFRS)

Abstract

This paper is concerned with the implementation of International Financial Reporting Standards (IFRS) in the Czech Republic. It was written as a reaction to constantly increasing number of businesses implementing IFRS. In order to ascertain the methods selected by such companies for IFRS implementation, I carried out my own research based on semi-structured interviews. The aim of this research was to determine the individual stages of implementation, which would be helpful for business anticipating IFRS implementation. Generalization of the individual interviews revealed that the process of IFRS implementation may be divided into four stages: project preparation, opening stage, trial operation and adaptation operation. The most important thing in the initial stage is to create a project plan. The opening stage contains preparation of the areas affected by the implementation and the changes in the information system; the output of this stage consists in draft statements or a financial statement. In the third stage, trial operation is launched and tested and errors are eliminated; the result is an opening balance sheet. The final stage of adaptation operation includes inspection, evaluation and corrections of possible errors. IAS/IFRS implementation is a multi-stage process, which is time-consuming and demanding in terms of qualified staff and funds.