In Switzerland, Swiss GAAP FER is an attractive alternative to international accounting standards. In recent years, Swiss GAAP FER has become established not only among traditional small and medium-sized entities, but also among a significant number of listed entities as well. The advantages of Swiss GAAP FER are, in particular, clarity, the numerous design options and reduced implementation and application costs.
In addition to the aforementioned advantages, various circumstances may lead entities to decide to launch a Swiss GAAP FER conversion project:
- Listing on SIX Swiss Exchange,
- Increase in transparency and creation of an economic basis for the management of the entity (as internal management reporting),
- Preparation for the entity’s disposal,
- Creation of a financing basis (bank requirements, covenants).
Within the framework of a Swiss GAAP FER conversion project, it is important to determine the basics regarding the scope of action and design options so management can make well-founded decisions during implementation.
Just like the tailoring of a custom-made suit, a conversion project must ensure a perfect fit for the presentation of an entity’s financial statements. The entity’s financial position and operations results must be disclosed as accurately and meaningfully as possible. In order for management to make sound decisions in the context of the implementation, the basis for the scope of action and design options is determined as part of a Swiss GAAP FER conversion project.
Our publication provides support for determining a sound decision-making basis for accounting policies. In this connection, a concrete Swiss GAAP FER conversion project serves as an illustrative example. This example sheds light on the critical accounting policies that KPMG’s Accounting Advisory Services Team (“KPMG AAS”) has frequently observed in the practical implementation of conversion projects as well as in other advisory and audit engagements. Potential considerations and solutions for defining accounting policies are presented in this context.