THE INSTITUTE of Chartered Accountants of Jamaica (ICAJ) adopted International Accounting Standards (IAS), earlier this year, as the national accounting standards for financial reporting purposes in Jamaica. The new standards become effective for financial periods beginning on or after 1 July 2002.
Since 2000, the ICAJ has been preparing the business community, regulators and its membership for the transition to IAS. This included presentations to various interest groups such as the Private Sector Organisation of Jamaica (PSOJ), the Jamaica Manufacturers' Association, the American Chamber of Commerce and the general membership of the ICAJ. As part of the Institute's public education programme, a number of seminars and workshops were held to sensitise interest groups and the public about the new standards, how they impact the reporting environment, and how companies should organise themselves to convert to the new standards.
The ICAJ also adopted International Standards on Auditing (ISA) with effect from July 1, 2002. This was a step in the right direction as accounting standards must be supported by an infrastructure that ensures that the standards are rigorously interpreted and applied, and problematic practices identified and resolved in a timely fashion. High quality auditing standards are, therefore, an important element of this infrastructure. Subsequent to the adoption of IAS on July 1, 2002, a number of companies have expressed concerns about the timing of the implementation of IAS in Jamaica. The affected companies are seeking more time for the implementation of IAS and have requested the ICAJ to consider a deferment to July 1, 2003. The main points put forward for the deferment were:
1. Companies were required to migrate to the new standards using guidelines issued under the Standing Interpretation Committee (SIC) 8. However, a new standard on first-time adoption would be issued in 2003, which provide for a more cost effective methodology than that which presently exists.
2. An Exposure Draft had been issued with nearly 800 pages that contain changes to a number of existing standards.
3. Outstanding issues exist between the requirements of the Jamaican tax authorities and various regulatory bodies on the one hand, and conflicting requirements of the IAS, on the other.
4. The European Union will not be adopting these standards until January 1, 2005. Additionally, a project with US GAAP was in process and not likely to be completed in the short term.
For more of this article see Friday's Financial Gleaner
