IFRS transformation of financial statements
IFRS transformation of financial statements is needed by companies with foreign shareholders or partners, companies raising loans or investment, and organisations that must submit IFRS statements to regulators in Ukraine. We take the Ukrainian financial statements prepared under national accounting standards (UAS) and convert them into a full IFRS package: statement of financial position, statement of profit or loss, cash flow statement, statement of changes in equity and notes.
The client receives statements in Ukrainian and English that can be handed to the parent company, a bank, an investor or a donor without further explanation. MK Audit has worked with international standards for more than 20 years and is a member of DFK International, so our report is clear to a foreign reader and is accepted by group auditors.
What is included
- review of the accounting policy and of the differences between UAS and IFRS for the specific company;
- reclassification of Ukrainian statement line items and individual transactions to IFRS requirements;
- preparation of the trial balance and transformation adjustments with working schedules;
- compilation of the full IFRS package based on the Ukrainian statements and the adjustments;
- notes to the financial statements and disclosures;
- consolidation of group statements where required;
- ongoing IFRS bookkeeping and reporting;
- audit of IFRS financial statements by a separate team;
- advice on the application of individual standards.
The transformation is performed by auditors with international qualifications (ACCA, DipIFR). If the company needs not only the statements but also an auditor’s report on them, we arrange a voluntary audit so that the transformation and the audit are performed by different specialists.
Who needs it
- LLCs and representative offices with foreign shareholders that report to the parent company annually or quarterly;
- companies raising loans from foreign banks or negotiating with investors;
- entities required by law to prepare IFRS statements;
- non-profit organisations, charitable foundations and donor-funded projects, when an international donor or head office asks for financial statements in an international format alongside a grant audit;
- groups of companies that need consolidated statements.
Service options
| Option | For whom | What you receive |
|---|---|---|
| One-off transformation | Companies that need IFRS statements once a year or for a specific transaction | Annual IFRS package with notes, working schedules of adjustments |
| Regular transformation | Subsidiaries and representative offices reporting quarterly | Statements for each period, a single methodology, a consolidation package |
| IFRS bookkeeping | Companies that need parallel accounting under two frameworks | IFRS bookkeeping and reporting as part of our accounting services |
How the work proceeds
- Request and proposal. You describe the company, the reporting period and the purpose of the statements. We send a commercial proposal within 1 day.
- Contract and checklist. We sign the contract, agree the reporting format and send you the list of documents.
- Execution. We analyse the accounts, prepare the adjustments, compile the statements and notes, and settle open questions with your accountant.
- Result and support. We deliver the statements in Ukrainian and English, explain each adjustment and answer questions from the investor or the group auditor.
Documents you will need
- UAS financial statements for the reporting and the prior period;
- trial balance and breakdowns of balance sheet items;
- the company’s accounting policy;
- lease, loan and borrowing agreements, major contracts with customers and suppliers;
- register of fixed and intangible assets;
- the parent company’s reporting format requirements, if any.
Timing
A first transformation for a small company takes two to four weeks after we receive the documents. Regular quarterly reporting is faster because the methodology and working schedules are already in place. The exact deadline is stated in the proposal.
Leave a request in the form below: a commercial proposal after we review the task, reply within 1 day.
How does transformation differ from parallel accounting?
Transformation is performed at the reporting date on the basis of the finished Ukrainian statements. Parallel accounting is kept continuously under two frameworks. For most companies transformation is simpler and faster, while parallel accounting makes sense when statements are needed monthly.
Can you both transform and audit the statements?
Yes, but the two jobs are done by different specialists to preserve auditor independence. Parent companies and banks accept this approach.
In which language are the statements prepared?
In Ukrainian and English. On request we add a reconciliation to UAS figures so that the Ukrainian accountant can see where each adjustment comes from.
Does a non-profit organisation need a transformation?
Only if the donor or head office asks for statements under international standards. In most cases a project audit under the donor’s requirements is sufficient.