Page 232 - SBR Integrated Workbook STUDENT S18-J19

Chapter 16

First time adoption: Practical factors

2.1 Practical factors

Before adopting any new accounting standards, an entity should consider the
following:

 Bonuses and performance related pay – impact of profit changes?

 IT systems – will they require updating or replacing?

 Covenants on loans – will they be breached?

 Earnings per share – will it reduce?

 Perception – will analysts view the move positively?

 Staff knowledge – is it sufficient?

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