Becoming a listed company comes with an extra level of stakeholder scrutiny from regulators, shareholders, and the public regarding the function of the business. For private entities, one heightened risk area is financial compliance, which involves adhering to Australian Accounting Standards (AASB) / International Financial Reporting Standards (IFRS).
BDO's IFRS Advisory team plays a key role in the success of your IPO journey by identifying risks of non-compliance with Accounting Standards.
What is an IFRS health check and why do I need one?
Initially, an IFRS health check can be a simple way to identify any issues on your journey to listing on a recognised exchange. It can be used as part of the Investigating Accountant’s Report, which involves an independent review of a company’s historical and/or projected financial information and any assumptions and material accounting policies adopted applicable to the information.
In particular, as part of the IPO process, you may need to undertake a transition to the IFRS-compliant reporting framework. This usually involves gathering additional information for the restatement of previously reported financial information. Items that usually require adjustment to ensure compliance with Accounting Standards include:
- Classifying convertible notes as debt
- Reversing inappropriately capitalised development expenditure
- Capitalising leases into the balance sheet
- Amending the timing of revenue recognition
- Expensing the value of equity compensation awards.
When should I undertake an IFRS health check?
Completing an IFRS health check should be performed before or at the time of appointing your IPO team and before conducting your audit of the financial information to be included in your prospectus.
How BDO can help
BDO's IFRS health check is a specialised transaction support service designed to be a quick and focused desktop assessment of your company’s accounting and financial reporting systems.
Under our methodology, the BDO IFRS Advisory team will identify, understand and communicate those areas of the company’s accounting and financial reporting system that are at high risk of non-compliance with Accounting Standards.
An IFRS Advisory expert will advise you on key accounting considerations, including identifying and remediating accounting and financial reporting system that are at high risk of non-compliance with Accounting Standards, prior to and throughout the audit and IPO process.
Engaging an experienced and capable IPO team is essential to a successful listing. BDO has extensive experience in providing audit, investigating accountant, tax and IFRS advisory services to companies seeking to list on the ASX. Contact a BDO specialist IPO IFRS adviser today.