Finance



Abstract

This paper is focused on the comprehensive description of International Financial Reporting Standard (IFRS). In this paper the importance of IFRS adoption, significance of IFRS in small, medium and large companies is thoroughly discussed. This paper also contains basic models and the paradigm along with the fundamental assumptions of International financial reporting standard. The advantages and the disadvantages of international financial reporting standards along with fundamental objectives of financial statement are also discussed.

Importance of IFRS

Introduction

International financial reporting standard (IFRS) is considered as common language that is commonly used in different regions of the world in all business affairs. It is an outcome for the growing investors in the world and increase in the number of the shareholders globally. International financial reporting standard is initially started as a result of balance accounting system across the European Union which harmonizes the worth which has made the concept appealing and attractive to the world. (Johnson, 1999)Many companies whether small companies, medium and the large companies are increasingly using the International financial reporting standard (IFRS) throughout the world. International financial reporting Standards have its own importance because the businesses of every type are using it because it is understandable and acceptable in most of the region of the world.

Overview

International Financial Reporting System (IFRS) are considered as an ordinary worldwide language in the affairs of business in order to make the accounts of an organization comparable and understandable across the international (Nobes,2009) boundaries. IFRS is an outcome of growing trade and increasing shareholders globally, and specifically essential for the companies that are developed in various in other countries. These companies are gradually replacing the other accounting systems. The standards that should be pursued by the accountants in order to keep the books of accounts that are comprehensible, accurate, comparable, dependable and also pertinent for the internal and external users.

IFRS was started as an effort, in order to balance the accounting system across the European Union, the value of coordination have prepared the idea appealing all over the world. IFRS is also known as International Accounting Standards (IAS). Board of (IASC) International Accounting Standard Committee issued (IASC) (Hope,2006) between the year 1973 and 2001. On April, 2001, the IASC took over by the (IAS) International Accounting Standards which took the responsibility of setting the new accounting standards. During the first gathering of the board, existing IAS and the Standing Interpretations Committee Standards (SICs) were adopted. The IASB had carried on to create the innovative accounting standard which is called as International Reporting standards (IFRS).

Framework

The theoretical structure of Financial Reporting states the fundamental principles form the basic IFRS.

The FASB and the IASB Frameworks are in the procedure of being congregated. The objective of combined frame work project is to (Hodgdon,2009) keep informed and progression towards the ideas that are currently prevailing in order to replicate the market changes, practices of business and the profitable atmosphere that took place in two or more decades since the concept was initially extended. Role of framework

DELOITTE STATES

When an interpretation ...