KPMG ARMENIA DEVELOPS GLOBAL METHODOLOGY FOR OVERCOMING DIFFICULTIES IN CONVERSION TO IFRS

ARKA
June 23, 2009

KPMG Armenia has developed a global methodology which presents a
structured approach to the conversion which is designed to assist
clients to convert to IFRS in the shortest possible time and without
incurring additional expenses, the audit company reported on Tuesday.

The company has worked out the methodology to help businesses meet
IFRS conversion challenges.

"Harmonization of financial reporting of Armenian listed companies
with those around the world will help to raise confidence of
international investors who seek to obtain comprehensive, transparent
and understandable information for their decision-making purposes. For
non-listed medium to large scale companies, having financial statements
prepared under IFRS means being better prepared to "go public"
via an Initial Public Offering ("IPO") should companies have the
need for more capital or if existing shareholders wish to divest",
the press release says.

The transition brings certain benefits to Armenia. Adopting IFRS will
result in reduced costs for those financial organizations and listed
companies which were required to report both under IFRS and ASRA by
eliminating the double reporting requirement. The greater confidence
in reliable and transparent information will also translate into
a20lower cost of capital, primarily in reduced interest costs.

"Many leading Armenian companies have already converted or are in
the process of conversion to IFRS.

Companies who have started the transition process, have already
gained a number of benefits, the most important of which is that IFRS
reporting really enhances the effectiveness of the company’s management
and decision making process since IFRS principles provide better
decision-making aids to management because they are more oriented to
a realistic reflection of economic efficiency, the press release said.

"On the other hand, the new Law brings a number of challenges for
Armenian companies in the process of transition to IFRS.

IFRS adoption means undergoing major changes as Armenian companies
predominantly align their accounting and reporting practices to comply
solely with the Armenian tax legislation requirements which usually
give rise to significant differences in the accounting treatments
with those under IFRS", the release says.

To help businesses meet IFRS conversion challenges, KPMG has developed
a global methodology which presents a structured approach to the
conversion.

KPMG was the first large international audit and consulting company
to open its office in and get a license for providing audit services
to banks and enterprises.

In 1995, the company started conducting up-to-international-standards
financial audit in Armenia.