IFRS ADOPTION

IFRS Adoption

IFRS Adoption

Introduction

International Financial Reporting Standards is the combination of accounting standards. It states that how different types of the transaction and other accounting events should be reported in the financial statement. It is declared by the International Accounting Standards Board.

International Financial Reporting Standards (IFRS) aspires to bring the entire nations in the world under a similar set of global accounting standards that presents consistency, transparency, and compatibility in financial reporting system. According to a fact financial regulators in several countries have generated high demand for IFRS compliant financial statement.

In 113 countries, more than 12,000 companies have implemented IFRS in some degree, and many other countries are enduring to implement the standards each year with the expectation of increased comparability of financial statement.

The impact on financial accounting reporting by implementing IFRS

Implementing IFRS will have a persuasive impact on the projects under accounting systems. It may have an impact on the non-financial companies. IFRS will have an impact on how companies track their leasing information. The audit committees and senior management will see the great impact of the IFRS implementation.

1)Relevance- the standard produced by them can able to meet the identified need of the capital market.

2)Leadership- they have developed and improved standard not just that they modify the status quo.

3)Objectivity- they have acted in the public interest the results generated from their standards were unbiased.

4)Responsiveness- they have responded the capital market for the development.

5)Transparency and Due Process- their standards process and procedures provided visibilities into standard processed procedures.

6)Comparability -the benefits of the IFRS implementation include improvement of comparability to other organizations in the same sector. It gives additional and better quality financial information for supervisory authorities and shareholders (Crook, 2004).

Issues in adopting IFRS

The Conversion to IFRS does not happen overnight. The Commercial Code also write the previous year's figures before mandatory IFRS. If, for example the first 31 December 20X2, an IFRS financial statements are prepared, we need comparative figures for 20X1, ergo balances talks for the first January 2011, ergo statements for 20X1 - This two-year retroactive plan transition is taken into account.

The conversion to IFRS raises a variety of technical and systems engineering issues that must be answered in the conversion process. It deeply affects the existing structures of accounting (McDonnell, & Joyce, 2004). The conversion process begins with answering the fundamental question of whether the original accounting continue on the basis of the HGB accounting rules ...