INITIAL PUBLIC OFFERINGS (IPOs)
To list shares or debt instruments on a stock exchange or MTF is normally a major step for companies and associated with many new rules, routines and processes. In connection with many IPOs, the issuer is required, or expected, to prepare its consolidated financial statements in accordance with IFRS.
To change accounting policies from Swedish GAAP to IFRS is often one of the most time consuming preparations pre IPO. Finalized IFRS figures need to be available well in advance of a planned IPO which means that it is preferred to initiate the GAAP conversion at least one, but preferably two, years ahead of the IPO. Sometimes, however, this is not possible due to the planned IPO date. In such cases, the GAAP conversion may be finalized in parallel with other IPO preparations, which then requires a more intensive work effort.
We have extensive experience of supporting companies convert to IFRS and can aid throughout the entire projects, e.g. with:
- Analyzing GAAP differences between legacy GAAP and IFRS,
- Implementing changed accounting policies,
- Preparation of annual and interim reports in accordance with IFRS,
- Financial information to be included in prospectus, and
- Preparation or update of an accounting manual.
When planning an IFRS conversion, it is important to remember that the auditor should review and approve the application which requires documentation of all steps, decisions and positions taken. In connection with an IPO on a regulated market, a stock exchange auditor will also be required to approve of the IFRS application. The right experience and methodology are key success factors for a successful project!
Projects where Fenix Advisory prepared businesses for an IPO
- Nasdaq Stockholm Large Cap: Preparation of historical financial information for a large group in accordance with IFRS and investigation and documentation of several accounting issues prior to the stock exchange audit. Preparation of an accounting manual. Discussing accounting issues with the company’s auditors. Investigation of differences between IFRS and RFR 2 (RFR 2 is applied by the Swedish parent company when the Group applies IFRS).
- Preparation for uplift to Nasdaq Stockholm: Analysis and documentation of differences between Swedish GAAP (K3) and IFRS. Restatement and documentation of areas affected by the IFRS conversion, including calculation of IFRS 16 Leases in an Excel model that the company then gets access to and can use independently. Development of company-adapted templates for interim reports and annual reports and help with preparing the bridges between Swedish GAAP and IFRS required for the first application of IFRS.
- Preparation for listing on Nasdaq Stockholm: Completion of analysis initiated by another company. Discussing critical accounting issues with auditors. Preparation of memorandums on critical issues. Calculation of leases in accordance with IFRS 16. Restatement of revenues as a result of material impact from the IFRS conversion. Preparation of an accounting manual. Support with preparation of consolidated financial statements to include IFRS effects. Preparation of the annual report in accordance with IFRS with restated figures.