IFRS conversion in Switzerland: moving from CO accounts to IFRS
An IFRS conversion begins before the first published closing. Define the reporting required, reconstruct comparative figures and document differences from Swiss statutory accounts. This practical approach helps organise your project's decisions, data and controls.
By Sarah Prieur · Swiss certified accountant
The essentials of an IFRS conversion
An IFRS conversion produces financial statements under international standards from records maintained under another framework, such as the Swiss Code of Obligations (CO). It affects the figures, accounting policies, comparative information and explanatory notes.
- IFRS 1 governs the first adoption of a complete set of IFRS financial statements.
- An opening IFRS balance sheet is needed at the transition date.
- Swiss statutory accounts and their separate obligations still require attention.
- A group reporting package is not necessarily a complete set of IFRS financial statements.
The first project deliverable should therefore define exactly what is required. Our introduction to IFRS and IAS helps distinguish the reporting frameworks.
Define the scope and transition date
Who needs the figures: a parent company, bank, buyer or capital market? Are you converting one entity or preparing consolidated accounts? Which financial year will be published, and what comparative information is required?
Illustrative timeline: a company plans its first IFRS financial statements for 31 December 2027, with one comparative year. Its transition date is 1 January 2026. The project must cover the opening balance sheet at that date, the 2026 comparative figures and the 2027 reporting year.
| Date | Work required in this example |
|---|---|
| 1 January 2026 | Opening IFRS statement of financial position |
| 31 December 2026 | Comparative figures and related reconciliations |
| 31 December 2027 | First annual IFRS financial statements |
| Before publication | Notes, approvals and any required audit |
This explains why the project should not start with only the December 2027 trial balance. Historical contracts, valuations and assumptions may already be difficult to retrieve.
Assess the differences between CO and IFRS
Compare existing accounting policies with the required treatments. The assessment helps focus time and budget on material differences and information that will be difficult to recover.
Common areas include IFRS 16 leases, revenue recognition, employee benefit obligations, deferred tax, provisions, financial instruments and business combinations.
Review the reporting perimeter too. A controlled entity may need consolidation even if it received little attention in earlier reporting. Identify reciprocal balances before attempting consolidation eliminations.
The useful output is a matrix showing the topic, CO policy, IFRS treatment, estimated impact, evidence required, responsible person and deadline. A list of standards alone does not provide a workable project plan.
Choose policies and prepare the opening balance sheet
IFRS 1 generally requires retrospective application, with mandatory exceptions and optional exemptions. These can avoid reconstructing the entire history in certain cases, but their use must be assessed and documented.
For example, using deemed cost for eligible assets or electing not to restate certain past business combinations may materially affect the work. Check each choice against IFRS 1's detailed conditions.
The opening balances involve more than a carry-forward. Recognise required items, remove items that fail the recognition criteria, reclassify balances and measure them under the applicable framework.
Simplified equity reconciliation: assume CO equity of CHF 800,000. Inventory with historical cost of CHF 260,000 is recorded at CHF 200,000 after a general CO reserve. Its net realisable value is CHF 270,000, so the IFRS adjustment restores cost to CHF 260,000 and increases equity by CHF 60,000. An employee benefit obligation reduces equity by CHF 100,000, and the illustrative net tax effect adds CHF 8,000.
IFRS equity = CHF 800,000 + CHF 60,000 − CHF 100,000 + CHF 8,000 = CHF 768,000. These assumptions are not standard tax rates or universal conversion adjustments. Review hidden reserves item by item against the relevant IFRS measurement rules.
Build comparatives and transition reconciliations
Comparatives follow the policies used for the first IFRS publication, subject to relevant transition provisions. Explain how the figures change from the previous framework.
Prepare clear reconciliations of equity and total comprehensive income required by IFRS 1. Avoid combining every difference into a vague “IFRS adjustments” line. Separate material effects from leases, pension obligations, revenue and other significant topics.
A useful reconciliation answers three questions: which item changes, which rule explains the change, and does the adjustment involve cash? This prevents a presentation-driven increase in EBITDA from being mistaken for a cash inflow.
In particular, IFRS 15 revenue recognition follows the customer contracts, rather than invoices or receipts alone.
Organise data, controls and any required audit
Assign a data source to each topic. Procurement or property teams often hold leases, human resources supplies employee benefit information, and sales teams provide variable pricing terms.
For each adjustment, keep the contract, calculation, accounting conclusion and approval record. The final file should not depend on one person's memory or spreadsheet cells with an unexplained origin.
A trial closing helps reveal missing information. Cover the notes, cash flow statement and consolidation eliminations too. Reliable numbers alone are insufficient if the supporting disclosures cannot be produced.
The need for an audit and its scope depend on legal requirements, contractual commitments and the reporting published. If an audit is required, plan its timetable and address independence early. An audit provides assurance within its defined scope, not an absolute guarantee that no error exists.
Prepare for 2027 and recurring IFRS reporting
IFRS 18 replaces IAS 1 for annual periods beginning on or after 1 January 2027. A first publication for the 2027 calendar year must therefore incorporate that framework and the related comparative requirements. Our article on IAS 1 and the IFRS 18 transition explains the presentation issues.
Some subsidiaries may also assess IFRS 19, which permits reduced disclosures for eligible entities. It does not remove IFRS recognition and measurement requirements, and small size alone does not establish eligibility.
After first publication, adjustments become recurring work. Assign each calculation to an owner, set closing controls and update the accounting manual when standards change. The annual budget should cover new transactions and maintenance of disclosure information.
Frequently asked questions
How long does an IFRS conversion take?
Timing depends on the reporting scope, historical data and accounting differences. A subsidiary with a few adjustments and a group with many entities need different timetables. An initial assessment provides the basis for a realistic estimate.
Do we need new accounting software?
Not necessarily. The main requirement is traceability between CO accounts, adjustments and IFRS statements. A supplementary tool may be sufficient for a simple scope; a complex group needs a more structured reporting process.
Can we convert only the current year?
For a complete first IFRS publication, the required opening balance sheet and comparatives must also be addressed. A limited internal reporting request may have another scope, which should be agreed with its recipient.
Must every hidden reserve disappear?
IFRS amounts must meet the applicable standards. Assess each valuation individually; conversion does not mean mechanically reversing every value adjustment recorded under the CO.
Does the conversion automatically include ESG reporting?
No. Sustainability reporting under IFRS S1 and S2 has its own framework. Assess legal obligations, group requests and the selected sustainability standards separately.
