Terms of Reference (TOR)

Consultancy Services for the Implementation of International Financial Reporting Standards (IFRS)

1. About JaRco Consulting

JaRco Consulting PLC is a leading international consulting firm based in Addis Ababa, Ethiopia, specializing in Monitoring, Evaluation, and Learning (MEL). We focus on livelihoods and economic security, WASH, health and nutrition, with cross-cutting themes of gender and capacity building in M&E. Our team implements large-scale evaluations, baseline assessments, and data quality assurance activities across Ethiopia and throughout Africa. Learn more at www.jarco.info.

1. Background of the Assignment 

To comply with Financial Reporting Proclamation 847/2014 and Council of Ministers Regulation 332/2014, JaRco Consulting plans to adopt the International Financial Reporting Standards (IFRS). The Accounting and Auditing Board of Ethiopia (AABE) has established a timeline for all companies in Ethiopia to adopt IFRS. To achieve this objective, JaRco Consulting has decided to outsource the IFRS implementation project and hire qualified consultants who can meet the specified criteria. 

1. Objective of the Assignment

The overall objective of the consultancy is to support JaRco Consulting PLC in successfully implementing IFRS and preparing its first IFRS-compliant financial statements in accordance with Ethiopian regulatory requirements and international accounting standards.

Specific objectives include:

• Assess the Company's readiness for IFRS implementation.  
• Identify gaps between current accounting practices and IFRS requirements. 
• Develop an IFRS implementation strategy and roadmap. 
• Prepare the Opening IFRS Statement of Financial Position. 
• Review and update accounting policies, procedures, and financial reporting frameworks. 
• Support the redesign of financial systems and chart of accounts. 
• Build the capacity of Company staff through training and knowledge transfer. 
• Prepare the Company's first IFRS-compliant financial statements. 
• Support management during the external review and regulatory submission process. 

1.  Scope of Work

The Consultant shall provide comprehensive technical assistance throughout the IFRS transition process, including, but not limited to, the following activities.

1. IFRS Diagnostic Assessment

Conduct a comprehensive assessment of the Company's existing accounting environment to determine the extent of changes required for IFRS implementation.

The review shall include:

• Accounting policies 
• Financial reporting practices 
• Recognition and measurement principles 
• Chart of Accounts 
• ERP/Accounting software 
• Internal controls 
• Financial management procedures 
• Documentation practices 
• Regulatory compliance 

Deliverable

• IFRS Gap Assessment Report with recommendations and implementation priorities. 

4.2  IFRS Conversion Strategy and Roadmap

Develop a detailed IFRS Conversion Strategy aligned with the Accounting and Auditing Board of Ethiopia (AABE) implementation framework.

The roadmap shall include:

• Project phases 
• Implementation timeline 
• Roles and responsibilities 
• Milestones 
• Resource requirements 
• Risk management approach 
• Communication strategy 
• Change management plan 
• Monitoring and reporting framework 

4.3  Opening IFRS Statement of Financial Position

Prepare the Company's Opening IFRS Statement of Financial Position in accordance with IFRS 1.

The Consultant shall:

• Determine IFRS transition adjustments; 
• Apply IFRS 1 exemptions and exceptions; 
• Prepare reconciliation schedules; 
• Develop supporting working papers; and 
• Document significant assumptions and professional judgments. 

4.4 Development of IFRS Accounting Framework

Review and update the Company's financial management framework to ensure full compliance with IFRS.

This includes preparation or revision of:

• IFRS Accounting Policies Manual 
• Financial Policies Manual 
• Accounting Procedures Manual 
• Standard Operating Procedures (SOPs) 
• Month-end and Year-end Closing Procedures 
• Financial Reporting Templates 
• Disclosure Checklists 
• Accounting Forms 
• Working Papers 
• Other supporting documentation necessary for sustainable IFRS implementation

4.5  Financial Systems and Chart of Accounts

Review the Company's accounting software and reporting systems and recommend all necessary modifications required to support IFRS reporting.

The Consultant shall assist in:

• Redesigning the Chart of Accounts 
• IFRS General Ledger Mapping 
• Financial Statement Mapping 
• Reporting Automation 
• IFRS Reporting Templates 
• Disclosure Schedules 
• Management Reporting Framework 

4.6 IFRS Financial Statements

Support the Company in preparing its first IFRS-compliant financial statements for the year ending 30 June 2026, including:

• Comparative financial information for the year ending 30 June 2025 
• Notes to the financial statements 
• IFRS disclosures 
• Supporting schedules 
• Disclosure checklists 

The Consultant shall ensure compliance with IFRS 1 and all applicable IFRS standards

4.7 Tax Impact Assessment

Assess the tax implications arising from IFRS adoption and prepare a report explaining:

• Temporary and permanent differences 
• Deferred tax implications 
• Corporate income tax implications 
• Compliance with Ethiopian Tax Laws 
• Recommendations for tax planning and compliance 

4.8 Capacity Building and Knowledge Transfer

Conduct practical training programs for Company staff covering:

• IFRS principles 
• New accounting policies 
• Financial statement preparation 
• Accounting system changes 
• Reporting requirements 
• Disclosure requirements 
• Practical application of IFRS 

The Consultant shall prepare customized training materials and ensure effective knowledge transfer.

4.9 IFRS Risk Assessment

Identify key risks associated with IFRS implementation and prepare:

• Risk Register 
• Risk Assessment Matrix 
• Mitigation Plan 
• Monitoring Mechanism 

4.10 Support During External Review

Provide technical support during the review of the Company's first IFRS financial statements by:

• Company Management 
• External Auditor 
• Accounting and Auditing Board of Ethiopia (AABE) 

The Consultant shall assist in responding to review comments and implementing required revisions.

4.11 Post-Implementation Review

Conduct a post-implementation assessment to evaluate:

• Compliance with IFRS 
• Sustainability of implementation 
• Remaining gaps 
• Lessons learned 
• Recommendations for continuous improvement 

5. Deliverables

The Consultant shall provide, at a minimum, the following deliverables:

1. Inception Report and Detailed Work Plan. 
2. IFRS Gap Assessment Report. 
3. IFRS Conversion Strategy and Implementation Roadmap. 
4. Opening IFRS Statement of Financial Position. 
5. IFRS Transition Adjustment and Reconciliation Schedules. 
6. IFRS Accounting Policies Manual. 
7. Financial Policies and Procedures Manual. 
8. Standard Operating Procedures (SOPs). 
9. Revised Chart of Accounts. 
10. IFRS General Ledger Mapping. 
11. Financial Statement Mapping Framework. 
12. IFRS Reporting Templates and Disclosure Checklists. 
13. IFRS Training Materials. 
14. Staff Training Completion Report. 
15. IFRS Risk Assessment and Mitigation Plan. 
16. Tax Impact Assessment Report. 
17. Comparative IFRS Financial Statements. 
18. First IFRS-Compliant Financial Statements, including notes and disclosures. 
19. Post-Implementation Review Report. 

20. Complete handover of all working papers and supporting documentation. 

    6. Duration of the Assignment

The consultancy is expected to commence in August 2026 and be completed within the timeframe agreed upon between JaRco Consulting PLC and the selected Consultant in accordance with the approved implementation roadmap.

7. Consultant Qualifications

The consulting firm shall demonstrate:

• Extensive experience in IFRS implementation. 
• Proven experience in IFRS conversion projects in Ethiopia. 
• Strong knowledge of Ethiopian financial reporting and tax regulations. 
• Experience working with private sector organizations. 
• Qualified team members with expertise in accounting, auditing, taxation, and financial reporting. 
• Excellent training and capacity-building experience. 

8. Required Documents

Interested firms shall submit the following:

1. Valid Business Registration Certificate. 
2. Renewed Trade License (2018 E.C.). 
3. Tax Identification Number (TIN). 
4. VAT Registration Certificate. 
5. Valid Practicing License issued by the Accounting and Auditing Board of Ethiopia (Firm and Key Professionals). 
6. Company Profile. 
7. Technical Proposal detailing the proposed methodology and implementation approach. 
8. Detailed Work Plan and Timeline. 
9. CVs of key professional staff. 
10. Evidence of at least three successfully completed IFRS implementation or conversion assignments. 
11. Client references or completion certificates. 

12. Financial Proposal. 

    9. Reporting and Supervision

The Consultant shall report directly to the Management of JaRco Consulting PLC or a designated IFRS Steering Committee. Regular progress meetings shall be held throughout the assignment, and all key deliverables shall be subject to review and approval by the Company before acceptance.

10. Confidentiality

All information obtained during the assignment shall be treated as confidential. The Consultant shall not disclose or use any information obtained during the course of the assignment without the prior written consent of JaRco Consulting PLC.

11. Safeguarding

JaRco Consulting is committed to safeguarding and promoting the welfare of all people and expects all staff, consultants, and partners to share this commitment. We have a zero-tolerance approach to sexual exploitation, abuse, harassment, and any form of misconduct.

All successful candidates will be required to comply with JaRco Consulting’s Safeguarding Policy and Code of Conduct and will be subject to appropriate pre-engagement checks.