This document discusses Siemens' implementation of International Financial Reporting Standards (IFRS). It notes that IFRS standards aim to introduce consistency to global financial reporting. European Union companies were required to use IFRS starting in 2005. Siemens, which was listed on the New York Stock Exchange and previously used US GAAP, transitioned to IFRS in 2008. The author's job responsibility involved implementing IFRS for Siemens' Telecommunications division within the defined timeframe.

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Case Study
Siemens
Job Responsibility: Implementation of International Financial Reporting Standards
(IFRS)
Sector/Industry: Telecommunication and Software
Siemens:
With the globalization of business, it became more important than ever to establish common
standards for the preparation of financial statements. A universal standard made it easier to
evaluate company accounts and more accurately compare business health across international
borders. While most of the companies in the world did their financial reporting according to
Local Generally Accepted Accounting Principles (GAAP), most of these countries had started
using International Financial Reporting Standards (IFRS). The problems like (i.e. using the local
GAAP) faced by both shareholders and
potential investors who were evaluating
different companies. Plus, the
marketplace had become much more
complex with businesses’ serving
international customers and using
suppliers from all over the world.
The International Financial Reporting Standards developed by the International Accounting
Standards Board present guidelines for reporting the financial activities of a business is similar
to local generally accepted accounting principles maintained by the Financial Accounting
Standards Board in any country, IFRS sought to provide an internationally recognized set of
standards to introduce greater consistency to financial reporting around the world.
Specifically, for U.S. businesses accustomed to GAAP standards, has started adapting to comply
with IFRS and require a number of significant accounting changes. Understanding how
switching to IFRS will affect their business becomes increasingly important as these business
grows beyond U.S. borders.
The Regulation of the European Parliament and Council on the application of IFRS was adopted
in July 2002. In accordance with the Regulation publicly traded European Union companies was
required to prepare their consolidated financial statements in accordance with IFRS for fiscal
years commencing on or after January 1, 2005. However, Member States deferred mandatory
Job Responsibility:
My job role includes implementation IFRS

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application of IFRS until 2007, for companies that either list debt securities only or which apply
internationally accepted standards other than IFRS due to a listing outside the European Union.
Accordingly, the latter particularly applies to companies listed on the New York Stock Exchange
(such as Siemens) and which prepare their consolidated financial statements under U.S. GAAP.
In Germany, the Bilanzrechtsreformgesetz (BilReG) implemented the option to defer mandatory
IFRS-application in October 2004. As a result, Siemens was required to prepare consolidated
financial statements in accordance with IFRS in fiscal 2008 for the first time (fiscal year
commencing on October 1, 2007). However, Siemens planed to prepare and publish IFRS
financial statements as of and for the two years ended September 30, 2006 as supplemental
information early in fiscal 2007. At the same time, those financial statements served as basis for
Siemens’ IFRS reporting beginning with the first quarter of fiscal 2007. Accordingly, Siemens’
opening IFRS balance sheet took place as of October 1, 2004 (the date of transition).
Note: One can refer a book written by me on IFRS implementation-
https://www.amazon.in/IFRS-GAAP-Practices-Accounting-World-ebook/dp/B078HXKHBC
IFRS Implementation:
This requirement i.e. consolidation by following International Financial Reporting Standards
(IFRS) norms necessitated all the companies to address global stakeholders. The regulatory
requirement of different countries also necessitated companies to do multiple reporting i.e.,
one as per home country standard and the other as per the host country standard. To
overcome multiple reporting and to address global stakeholders, a uniform system of reporting
was felt necessary to facilitate comparisons, which resulted in the establishment of
International Accounting Standard Board (IASB) which issues International Financial Reporting
Standards (IFRS).
Impact:
Successfully implement the IFRS for Siemens Telecommunication division at the same time
within defined time frame.
Expectation-
1. Setting up Teams:
- Implementation of IFRS