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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
Aerospace
Transportation
Revenues: $9.4 billion (48% of total revenues) Backlog: $16.7 billion Employees: 28,900
Revenues: $10.0 billion (52% of total revenues) Backlog: $27.1 billion Employees: 33,800
$19 billion
Europe 48%
Canada 5%
63,000
Europe 49% United States 12%
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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
Dec. 31 2008
Dec. 31 2009
Dec. 31 2010
Dec. 31 2011
Update on progress, timeline and key elements Describe major differences identified, including assumptions
Decisions made on accounting choices available Quantified impact of IFRS on each line of F/S
Initial awareness
Detailed assessment
Implementation roll-out
May 1, 2007
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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
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3. Mixed approach Selection of approaches 1 and 2, based on a cost/benefit analysis wherever a choice is available Final position in the range of possible alternatives under the mixed approach depends in great part on resource availability and time constraints
Mixed approach was selected to ensure a proper balance between costs (available resources) and benefits (best practices)
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Other stakeholders
External Advisor
Operations: Division Controllers Project Controllers Heads of Finance Heads of Accounting Group Finance
Shared Services: Legal Dept Tax Dept IT Dept Procurement Human Resources Structured Finance
Auditors
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MLN
Services
PPC
TTS
LRV
LOC
Steering Committee
Composition
CFO V.P. Finance: Corporate Aerospace Transportation Corporate V.P. Financial Reporting
The key decision-makers for financial matters must be members of the Steering Committee, including the CFO of the Corporation
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Shared Services
Participate in the project for special requests (e.g. related tax matters) Assist with data collection for some specific topics (e.g. complex contract accounting analysis or issues related to securitization) Review implications on related matters such as debt covenants, employee benefit arrangements and investor relations
All levels
Implement process and system changes
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Final scoping of the project is difficult due to expected changes to IFRS during the conversion period (the final scope of the project is a moving target) The difficulty in monitoring the proposed changes to IFRS is compounded by the fact that relying on the content of an exposure draft may lead to inefficiencies if its content is modified before final adoption
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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
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Core and extended teams must raise opportunities for improvements. For example:
Align financial year ends of subsidiaries Standardize procedures across the operating segments and functions
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IT Systems
IT
Internal processes
External stakeholders
Creditors
Legal
Investors
Financial reporting
HR Investors Relations External MD&A, F/S and AIF Internal F/S, Budgets and Forecasts Covenants and Other Financing Clauses Compensation Plans
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Conduct a kick-off meeting with all key participants Senior managers must participate Overall review of the project Allocate responsibilities among participants based on an agreed upon timeline
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Other tasks
Design and develop financial reporting processes, businessrelated processes and operational systems Prepare a model of the IFRS financial statements
Identify all additional disclosures and their impact on systems and processes
Design tools to prepare IFRS comparative information Provide selected training across the organization Assess impact and define a plan of action for the following related topics:
Budgets/forecasts and compensation plans Debt covenants or other relevant financing clauses
Fair value measurement will bring a higher degree of earnings/balance sheet volatility
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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
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Implementation roll-out
Test roll-out systems and processes Perform data gathering and prepare IFRS opening balance sheet and comparative financial statements Prepare full IFRS financial statements Communicate impact and new policies to external stakeholders
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Overview of Bombardier Introduction to the IFRS Project Planning phase Design and solution Implementation roll-out Conclusion
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7) Identify the impact of the project outside the finance function (e.g. debt covenants, IT, and compensation plans).
8) Plan and implement changes to internal controls based on expected changes to processes.
9) Identify new disclosure requirements early (this could have a significant impact on systems).
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