Most federally regulated firms are on track to implement International Financial Reporting Standards by the start of 2011, the Office of the Superintendent of Financial Institutions said Thursday.

OSFI reports that it has now received initial IFRS progress reports from most federally regulated financial institutions, and its review of these initial reports finds that the majority of FRFIs “have well developed project governance processes in place and that IFRS conversion plans are receiving an appropriate level of attention from senior management.”

“The reports also suggest that the conversion projects for the majority of FRFIs are adequately resourced and are on track to facilitate a smooth transition to IFRS,” it adds. “OSFI is contacting FRFIs where material deficiencies in plans or processes were noted.”

It does offer additional guidance on a couple of issues. For one, OSFI noted that some firms are using proposed IFRS standards, rather than current standards, for their impact analysis. Also, some FRFIs are delaying the analysis of some standards until they are finalized. It worries that there is some risk that firms that delay their analysis may not have enough time to ensure they are ready to adopt the new standards by the conversion date.

To ensure that firms are ready for the 2011 conversion date, it is asking them to undertake an initial IFRS impact assessment using current standards. OSFI also recommends that firms undertake impact assessments of any proposed standards that could have a material impact on their financial statements where the target implementation date falls before or on the 2011 conversion date.

Additionally, OSFI asks firms to provide preliminary estimates of the range of quantitative impacts for key standards. And, it notes that, while it has already flagged 13 accounting standards as potentially having the greatest impact on financial institutions, 15 additional standards have been identified by several firms as having a high impact on financial statements, so it asks firms to consider whether these additional areas (which are listed in a letter from OSFI) will have a high impact on their reporting too.

IE