New international accounting standards that have been formulated in the wake of the financial crisis will have a major effect on reporting procedures for companies in Bahrain and the Gulf region, said an expert.

The new International Financial Reporting Standards (IFRS) which are governed by the International Accounting Standards Board, and are widely accepted across the region, will come into effect at the beginning of 2013.

But firms, finance officers, accountants and investors should be looking at how they will effect financial reporting now, according to KPMG Fakhro audit and advisory partner Mahesh Balasubramanian.

'These new standards are designed to improve transparency and have particular relevance to this region where they look at consolidating reporting on joint ventures,' he said.

'Most of the oil and gas industry across the region operates as joint ventures while even small businesses like bakeries tend to be joint ventures because of the need for a local partner.

'There is a whole suite of changes as to how financial reporting will have to be carried out in the near future and we will be holding a number of seminars and workshops to examine the interpretation of these new rules in the run up to implementation,' he said.

'When the financial crisis hit there was a lot of pressure on the need for setting new standards and enhancing the quality of reporting and these new rules put this in place,' he added.

'They cover a wide range of issues from fair value measurement to how accounts can be consolidated and there are quite a number of significant changes in setting new standards.

'We anticipate new challenges in the practical application of these standards including the continuous assessment of effective controls,' he added.-TradeArabia News Service