Hiring for IFRS Conversion: The Skill Set You Need

An IFRS conversion is one of the few finance projects where the wrong hire is discovered late and costs a great deal. It is bounded, technical, deadline-bound and largely invisible until the first reporting date under the new framework — at which point any gaps become an audit problem rather than a project one. Businesses converting from FRS 102 to IFRS, usually because an investor, a lender or a listing requires it, need a specific and fairly scarce skill set. This guide sets out what the project actually involves, the capability it demands, whether to hire interim or permanent, and how to specify the role so the shortlist contains people who have done it.

Why businesses convert

Conversions are almost never voluntary. The common triggers: an investor or acquirer reporting under IFRS who requires the subsidiary to align; a listing or admission, where IFRS is required or expected; a lender or covenant package defined on IFRS measures; an overseas parent consolidating under IFRS; or a transaction where the buyer’s diligence is conducted on an IFRS basis. Each carries a hard date, which is why conversions are almost always time-pressured — and why the hiring decision usually has to be made quickly.

What the project actually involves

Conversion is not a translation exercise. It is a series of technical judgements applied retrospectively, each with a knock-on effect — the standards themselves are issued by the IFRS Foundation and endorsed for UK use through the process overseen by the Financial Reporting Council. The workstreams:

Gap analysis. Identifying every area where the business’s current FRS 102 treatment differs from IFRS, and quantifying the effect. This is the foundation and it determines everything that follows — done badly, the project discovers problems late.

The high-impact standards. In most conversions the work concentrates in a handful: IFRS 15 revenue recognition, where the five-step model frequently changes timing; IFRS 16 leases, which brings operating leases onto the balance sheet and reshapes EBITDA and covenant measures; IFRS 9 financial instruments, including expected credit losses; and business combinations, goodwill and intangibles, where FRS 102 and IFRS diverge on amortisation.

Transition date and restatement. Establishing the opening balance sheet, applying the first-time adoption exemptions available, and restating the comparative period. This is where technical judgement is most concentrated and where inexperience shows.

Deferred tax. Every measurement difference has a tax effect, and deferred tax under IFRS is one of the areas where conversions most often go wrong. See deferred tax fundamentals.

Disclosure build. IFRS disclosure requirements are materially heavier. The notes are a project of their own and are usually under-scoped.

Systems and process. Chart of accounts changes, lease data capture, revenue contract data, and the ongoing reporting process under the new framework — because the conversion ends but the reporting continues.

And the wider consequences: covenant definitions, bonus and incentive measures, distributable reserves and management reporting all move when the framework does. Businesses that treat conversion as a technical accounting exercise are surprised by these.

The skill set you actually need

Four capabilities, and the first is the one most specifications omit.

Prior conversion experience. Not IFRS knowledge — conversion experience. Someone who has reported under IFRS knows the destination; someone who has run a conversion knows the route, the exemptions worth taking, where the effort concentrates and what gets discovered late. The difference is worth a great deal on a deadline, and it is the single most useful filter in the shortlist.

Technical depth in the standards that matter to you. Which ones depends entirely on your business — a services business with long contracts needs IFRS 15 depth; a retailer with a property estate needs IFRS 16. Identify yours from the gap analysis and specify accordingly.

Documentation discipline. Every judgement needs a memo the auditors will accept, written at the time rather than reconstructed. Conversions generate a large volume of technical papers, and a candidate who cannot write one clearly will slow the audit considerably. See writing technical accounting memos.

Auditor management. The auditors will be involved throughout, and a conversion where positions are agreed as they are formed goes smoothly; one where they are presented at the end does not. This is a relationship skill as much as a technical one.

Systems and data capability sits underneath all four, particularly for IFRS 16, where the practical difficulty is usually assembling complete lease data rather than the accounting itself.

Interim or permanent?

For most businesses the answer is interim, and the reasoning is straightforward.

The work is bounded. A conversion has a start, an end and a deliverable. Once the first full reporting cycle under IFRS is complete, the specialist workload drops sharply — and a permanent hire made for the project becomes an expensive general resource.

The experience is scarce and expensive to hire permanently. Conversion specialists command a premium; buying that premium for six months is materially cheaper than carrying it indefinitely.

And the pattern recognition matters most under deadline. Someone who has done three conversions will move faster than a strong technical accountant learning on yours — and the qualification (ICAEW or ACCA in most cases) is the baseline rather than the differentiator, and on a fixed reporting date that speed is the whole point.

The case for permanent exists where the conversion is the start of a wider change — a group heading for listing, or a business whose reporting complexity is increasing permanently. In that case hire the permanent reporting accountant or group financial accountant you will need anyway, and choose one with conversion experience.

A common and sensible hybrid: an interim specialist leads the conversion while your permanent Financial Accountant works alongside them and inherits the ongoing reporting. You buy the expertise and keep the knowledge, which is the outcome to aim for.

What it costs

The comparison worth making is against advisory fees. A conversion run entirely by an accountancy firm costs several times an interim specialist for the same technical work, and leaves less knowledge in the business afterwards. Most businesses use both — an interim running the project day to day, with the auditors or an adviser consulted on the hardest judgements — and that combination is usually the best value. Day rates across the function are in our interim rate card.

Specifying the role

Four things to include, and the first is the one that transforms the shortlist. Name the trigger and the deadline — “IFRS conversion ahead of investor reporting, first IFRS accounts for the year ending [date]” tells a specialist exactly what they are being asked for. Name the standards you expect to matter, from your gap analysis. State the entity structure and framework you are converting from. And say what happens afterwards — whether the role ends, converts, or hands over to a permanent hire; specialists plan their year and vagueness costs you candidates.

For assessment, three questions do most of the work: how many conversions have you run and what were the triggers?; which standard caused the most difficulty and why?; and what did you discover late that you would look for earlier next time? That last question separates people who have genuinely run one from people who have supported one.