By Ademola Alawiye

Friday, 26 Nov 2010

As developed countries around the world begin to adopt the International Finance Reporting Standards fully, the Nigerian Accounting Standards Board has said that publicly quoted companies in Nigeria must adopt the standards by 2012.

The Chief Executive Officer, NASB, Mr. Jim Obazee, disclosed this on Thursday at a seminar organised by PricewaterhouseCoopers, titled, ”Preparing for First Time Adoption of IFRS”, in Lagos.

According to Obazee, all publicly quoted companies will be mandated to switch fully from the Nigerian Generally Accepted Accounting Principles to IFRS before 2012. He added that all public companies would begin the use of IFRS by January 2012.

He noted that the transformation would be in different phases of programmes, noting that the board was working together with all the regulators.

Obazee said, ”We are going to have the transformation in different stages. The first step is what we are going through now. We are setting up centers of excellence in Abuja; the regulators will be trained first, while the university lecturers will follow so that IFRS can be instituted in universities.”

On guidelines for effective transition, he said, ”We‘ve put some measures in place, which include public sensitisation, passing of the financial reporting council bill into law, updating the information technology systems and chart of accounts in the public sector.

”We are reviewing existing legislation that are inconsistent with effective implementation of IFRS and also directing universities to update syllabus of tertiary institutions to accommodate IFRS.”

Meanwhile, a senior official of PwC, United Kingdom said that IFRS would have a broad effect on Nigerian banks.

The Global Leader, Capital Markets Group, PwC, Mr. Simeon Gealy, said, ”IFRS will have a broad impact on Nigerian banks. It will help the credit risk and market risk departments of all the banks. Risk management was one of the major causes of the banking crisis. With IFRS, there will be more transparency and disclosure because it is all encompassing.

“IFRS increases transparency in the financial market because it allows for more information in the balance sheets of companies.”

Also speaking, the Managing Partner, PwC, Mr. Ken Igbokwe, said, ”IFRS is not just about reporting, it is about measuring and reporting business performance and, therefore, it‘s more important that line managers understand it than it is for the accountants who will report it.”

Source: Punch