IFRSINTERNATIONAL FINANCIAL REPORTING

STANDARDS

INTRODUCTION WHAT IS IFRS

A set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements .

INVESTOPEDIA EXPLAINS

“Goal of IFRS is to make international comparisons as easy as possible.”

WIKIPEDIA EXPLAINS

IFRS are standards , interpretations and the framework adopted by international accounting standards.

THE REGULATORY BODY The regulatory body which has come out with these standards is INTERNATIONAL

ACCOUNTING STANDARDS BOARD(IASB).

It was first known as International accounting standards committee (IASC) which was introduced in 1973.

The IASC was converted into IASB in the year 2001. Headquarters is at London

The IASB had 14 committee members .

In 2001 the IASB adopted all the 41 standards issued by IASC.

Many of the standards forming part of IFRS were known by old name IAS

GOAL OF IASB to adopt common accounting language

called as IFRS. to create global standards that are

transparent and of high quality

PRINCIPLES OF IFRS

Fair presentation and compliance with IFRSsGoing ConcernAccrual basis of accountingMateriality and aggregationConsistency of presentation

ifrsglobal development

•Approximately 113 countries•Includes the European union that comprises of 27 member states•India along with China, Canada, Brazil, Korea, Japan, Russia will accept it by the end of 2011

•It is estimated that the number of countries that will be switching over to IFRS by the end of 2011 will be 150.

•More than 12,000 companies have adopted IFRS all around the world.

•The European Union made is mandatory for companies registered in its member states and whose shares are listed in the European Union regulated market, to compulsorily submit their financial statements under IFRS norms.

•Australia and New Zealand are also compelling their public companies to adopt the IFRS norms.

•Even the U.S securities exchange commission (SEC) has allowed foreign private issues to use IFRS without reconciliation to U.S GAAP.

•U.S may converge to IFRS starting by 2014.

Benefits of adopting IFRSTransparency and comparabilityLow cost of capitalEliminates need for multiple reportingTrue value of acquisitionCross border transaction Sets a benchmarkImprovement in planning and forecasting

Challenges

A Hard Rock To Drill

The problems faced by ifrs?

Time Constraint Rigid Training is Required Re structuring and New Software

Implementation is required Cost constraint Conceptual Difference

Convergence of IFRS in India • Legal and/ or regulatory framework

•To reduce or eliminate the alternatives so as to ensure comparability.•To reduce or eliminate the alternatives so as to ensure comparability.