Financial standard conversion

Are you considering a financial standard conversion?

The requirements of the Swiss Code of Obligation do not provide for a fair presentation as a common practice due to its interpretation of the principle of prudence and its orientation towards creditor protection.

For companies aspiring to greater transparency in their financial reports or pursuing a listing on the SIX Swiss Exchange, other stock exchange or for an exit of investors, a financial statement conversion becomes thus inevitable.

Consequently, those corporations must contemplate which accounting and valuation principles they want to apply along with the level of transparency they intend to provide to the readers of their financial statements.

Currently, nearly half of the companies listed on the SIX Swiss Exchange publish IFRS-compliant consolidated financial statements. Comparatively, Swiss GAAP FER is in use by another third of the listed companies. The remaining companies apply US GAAP or special legal regulations (e.g. banks).

Martin Stevka

Partner, Head Accounting Advisory Services Corporates

KPMG Switzerland

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Daniel Haas

Partner, Co-Head Accounting Advisory Services Corporates

KPMG Switzerland

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Conversion to national and international financial reporting standards

Find out more about the challenges and benefits when considering an IFRS, US GAAP or Swiss GAAP FER conversion.

Overview of differences between financial reporting standards

What needs to be considered before a financial standard conversion?

Conversion of financial statements to Swiss GAAP FER, IFRS or US GAAP imposes certain challenges, which must be thoughtfully considered.

Financial goals

The employed accounting standards substantially influence the portrayal of a company's economic situation. Do you have financial ambitions when implementing a new GAAP?
Governance and structure
- Do you need to change your accounting standards as a result of being acquired or some other transaction?
- Do you need to change your accounting standards as a result of planning an IPO?
- What does an accounting conversion mean for your organization?
- What are the main differences between your current accounting standards and your future setup?
Staff and know-how
- How many of your finance staff have accounting conversion know-how?
- How many of your finance staff have profound knowledge of Swiss GAAP, IFRS or US GAAP?
- Do you have sufficient resources for a conversion project, which may extend from multiple months up to one year and comes in addition to daily work?
- Do you have a project organization, which will ensure effective and efficient execution of a conversion project?
Processes

What impact will the new accounting standards have on your systems, processes, and internal controls?
Information

Do you have quality data available for a successful implementation of a new accounting standards?

Our contribution to your conversion

Methodology and experience to effectively assess your current accounting policies and to help you implement the required changes
Expertise in managing and delivering complex, large-scale global projects
Experienced project managers, which ensure appropriate level of project communication, identification and resolution of issue, meeting deadlines and alignment of responsibilities
Suite of tools to ensure smooth and efficient conversion projects
Audit trail documentation and support in discussions with auditors

Your benefits

Expert team on short notice with accounting and project management expertise
Pragmatic and solution-oriented advice
Ongoing knowledge transfer to build Swiss GAAP FER, IFRS of US GAAP competence within your organization
Short communication channels
Quick and easy access to a wide range of expert knowledge within KPMG globally and across all disciplines and services
Smooth accounting conversion to Swiss GAAP FER, IFRS or US GAAP that allows you to devote more time to the daily business and the pursue of other projects
Financial report pragmatically tailored to the individual needs and characteristics of your company
Compliance with Swiss GAAP FER, IFRS or US GAAP accounting and reporting requirements

Our approach to financial conversion projects

Our Accounting Advisory Services for Corporates supports you with first-time adoption of a new accounting framework like Swiss GAAP FER, IFRS or US GAAP.

Depending on prevailing circumstances, our delivery process is completed within 6 weeks to 12 months.

Our GAAP conversion projects typically include the following steps:

Phase 1: Analysis

Kick-off workshop
Compilation of project plan
Installation of project management organization
Preliminary analysis of your company's accounting landscape
Identification of accounting differences and definition of measures

Phase 2: Design

Determination of accounting strategy and aspired level of disclosure in the financial statements
Definition of accounting policies and compilation of accounting memoranda and accounting manuals
Review chart of accounts and identification of adjustments
Compilation of reporting packages and preparation of mock-up financial statements
Compilation of accounting memoranda and accounting manuals

Phase 3: Implementation

Preparation of financial statements or consolidated financial statements in accordance with the new GAAP incl. opening balances as of date of transition
Audit of the first financial statements, throughout which Accounting Advisory Services team can accompany you
Training to the financial staff members