The government has called for increased transparency in the financial sector with the implementation of the new standards scheduled to get underway from January 1, 2012.
Dr. Sarath Amunagama, Senior Minister of International Monetary Co-operation said that Sri Lanka needs to strike a balance between growth and inflation, and urged for more transparent regulations to be implemented starting with the International Financial Reporting Standards (IFRS) to insure shareholders would “play” on “an even field.”
He was addressing the inauguration of the two day workshop supported by the Sri Lanka Bank’s Association (SLBA), Financial Architects and Providence Networks and Solutions at the Taj Samudra this week held to study implementation of the IFRS.
The new standard was introduced to Sri Lanka by the Institute of Chartered Accountants of Sri Lanka (ICASL) in order to converge with IFRS, by issuing a Sri Lanka Financial Reporting Standards (SLFRS) and Sri Lanka Accounting Standards (LKAS) for annual financial periods.
Sri Lanka was now on a ‘growth track’ and must focus its energies on better financial regulation and reporting, starting with IFRS.
Dr Amunagama cited examples such as the US recession, stating there were lessons to be learned on how foreign banking systems failed.
‘Sri Lanka is a country on a growth track, with new development taking place in railways, roads and ports, a boom in tourism, a strong foreign reserve, a reduction in unemployment and inflation which puts us in a strong position to continue our 8% growth,” he said.
He however cautioned the need to strike a balance between growth and inflation, urging more transparent regulations to be implemented, starting with IFRS to insure shareholders would ‘play’ on ‘an even field’.
Delivering the welcome address Providence Networks and Solutions MD Dr. Vaz Gnanam said, “We stand at a time of incredible opportunity. Ensuring transparency will allow our institutions to garner trust, hence increasing opportunities not just locally but globally. We hope that as a tool, this academy will ensure that Sri Lankan financial institutions are able to not only successfully implement IFRS but also position themselves across a world stage.
Ernst & Young Partner Manil Jayesinghe speaking at the workshop said the adoption of the new standards will result in a reduction in cost of capital, an increase of transparency and one global reporting and financial language for the near future.
Sri Lanka currently adheres to a 2004 version of IFRS, with 28 new standards to be revised and 12 new standards to be implemented, and that the effect will be tsunami-like, with many changes to take place.
“The short time table will no doubt cause stress. Know the gaps, and go about bridging those gaps in the most time sufficient manner,” he said adding that although it will ideally take about two to three years the country would however have to settle for a ‘quick fix’. |
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