International Financial Reporting

International Financial Reporting

Introduction

This study aims to identify the major changes that the international standards accounts have been suffering in the adaptation process for the adoption of IFRS. This is a descriptive study, carried out by means of literature and documental qualitative approach. The research results show that the new IFRS has altered published the following matters: financial instruments: as to their classification and the application of impairment testing, the consolidated financial statements, investments jointly controlled; disclosure of investments in other entities and the measurement air value. This study analyzes the U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). It examines the usage and practicality of U.S. GAAP and IFRS i.e. application in representing the financial information by comparing both the systems.

The basic understanding in terms of comparability in the framework of these two reporting systems is valid when comparing the firms with the same economic outputs. Similarly, firms with different economic outcomes might consider different reporting system as well. In the United States, public companies may not be allowed to adopt the IFRS in the near future, but it's the matter of fact that the cross border merger and acquisitions (M&A) and the non US stockholders' need certainly require the use of IFRS in representing the information (Barth et al., 2012). IASB and FASB are working together to form a unique procedure for reporting by working on the major significant differences and the need to address them. Stresses also that the issues that are being analyzed and changes the joint project of the IASB and FASB are: financial instruments, leases; revenue recognition of customer contracts; insurance contract (Steele, 2012). Therefore, it is concluded the monitoring of the proposed changes is of fundamental importance in shows two main aspects: the accounting community to be aware of the impacts that these changes may cause and prepared for their application; contribute suggestions for improving the proposals under consideration in the IASB board.

Discussion

Accounting standards establish accounting rules a country and determine what should be the accounts of a company. The purpose is to ensure a consistent approach to accounting at national level. The globalization of finance has promoted the trend toward accounting harmonization at the international level, in order to facilitate the process of performance comparison between companies registered in different territories. This change has led to harmonize national regulatory authorities to adopt increasingly international accounting standards developed by the Council of the IASBIFRS commonly called "International Accounting Standards", International Financial Reporting Standards (or International Financial Reporting Standards, in a free translation) is the set of rules, principles, and interpretations based on publications of the IASB (International Accounting Standards Board). Previously, the International Accounting Standards were known to IAS (International Accounting Standard) and were issued by the IASC (International Accounting Standards Committee). From April 2001, the assignment of editing International Accounting Standards was made by the IASB / IFRS Foundation which unified the IAS and publications thereafter issued under the "brand" IFRS (Hail, Leuz & Wysocki, ...