The International Financial Reporting Standards (IFRS) are a set of international accounting standards issued by the International Accounting Standards Board (IASB), based in London. These standards are designed as a common denominator for accounting activities worldwide.
The Colombian State, considering its global integration, free trade agreements and the need to actively participate in the international financial dynamic, has decided to adopt the International Financial Reporting Standards, which will allow the global standardization of financial information, ensuring its uniformity and transparency and generating greater trust and efficiency for national and foreign customers and investors.
Therefore, the Congress of the Republic issued Act 1314/2009, which supports the internationalization of economic relationships and the introduction to the country of global financial operations (foreign investment), thus allowing the country’s dynamic development through the use of high quality standards of accounting and information assurance, and generating trust in the global market.
This Act establishes the convergence of accounting, financial information and information assurance standards with international standards based on best practices and the rapid development of business.
The Technical Council of Public Accountancy was appointed as the entity in charge of guiding the convergence process in Colombia of accounting, financial information and information assurance standards with international standards.
The strategic guidance issued by the Technical Council of Public Accountancy proposed that accounting, financial information and information assurance standards should be applied differently among three groups responsible for preparing financial statements: Group 1, Group 2 and Group 3.
Through the Ministry of Commerce, Industry and Tourism and the Ministry of Finance and Public Credit, the State has regulated Act 1314/2009 by way of Decree 2784/2012, which establishes the regulatory technical framework applicable to the entities within Group 1; Decree 2706/2012, which establishes the regulatory technical framework applicable to the entities within Group 3; and Decree 3022 of December 2013, which establishes the regulatory technical framework applicable to the entities within Group 2 SMEs.
The adoption of IFRS provides an opportunity to improve companies’ financial operations by offering greater consistency in accounting policies, obtaining potential benefits from greater transparency, increasing comparability and improving efficiency.
Our consulting in IFRS implementation for SMEs includes:
- Technical-accounting diagnosis of the Company, identifying qualitative and quantitative impacts on the convergence process.
- Identifying policies to be reviewed.
- Structure design of the new financial information presentation.
- Defining financial and accounting policies and procedures.
- Chart of accounts based on IFRS.
- Assistance in the implementation process.
- Worksheet and opening balance analysis.
- Training the relevant personnel in the accounting department.
- Post-implementation monitoring.
- Financial audits.