Managing fixed assets in relation to IFRS

A recent article on CFO.com, US Will Be The Outlier Without IFRS, cites an international accounting rule maker stating that the United States will pay a high price if not able to embrace International Financial Reporting Standards within the next five years.

Many organizations are currently still debating the merits and costs associated with switching to IFRS requirements. While the expense of switching to IFRS seems to outweigh the benefits associated with the migration, there are some keen qualities to take note, for example the management of fixed assets in relation to IFRS requirements. The change to IFRS could be an opportunity for asset utilization.

Good Housekeeping
With many companies now reporting a capital expenditure freeze, the ability to reuse and reinvigorate existing asset value will become increasingly important as the recession bites. Organizations across the country are imposing far tighter financial controls – and capital expenditure is being reduced to the bare minimum. Coming so close on the heels of the significant expenditure and resource required to manage the transition from to US GAAP to to IFRS, it is tempting for the finance department to batten down the hatches and dig in for the long haul.

What happened to the assets that were replaced by the shiny, new equipment? Are they being used across the business – or simply left unused in a cupboard or warehouse? With no budget forthcoming for new purchases, now is the time to get an accurate handle on corporate assets to ensure maximum utilization and value.

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