The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.
Being important to the discipline of accounting, the objectives of IFRS and IAS are to give guidance on the presentation of financial statements. IFRS as issued by International Accounting Standards Boards …show more content…
When developing and revising concepts and standards, the creation does not override or change any existing, but consider relationships with existing standards in order to provide high input. With the merging of IASB and FASB in attempt to develop a comprehensive and common conceptual framework, the focus remains in developing uniform concepts applicable to business entities. The improvement of the concepts leads to more ideas through publications and establishment of a committee such as the Committee on Accounting Procedures (CAP), which was the first standard-setting body. The CAP was created in 1939 by the American Institute of Certified Public Accountant (AICPA) when public losses from the stock market collapse in 1929, (Robert, …show more content…
The move to use IFRS standards was coupled with diverse effects. The demand for global harmonization of accounting principles and standards, as well as approaches leads to the implementation and adoption of influential criteria in internal organization and accounting strategies without reducing standardization of the accounting standards. For instance, the global reporting standard requires countries to apply an international recognized framework such as IFRS and U.S. GAAP when preparing consolidated financial statements. Implementing IFRS should lead to greater international harmonization with respect to the consolidated accounts of the listed companies. Therefore eliminating different methods of accounting for the same transaction leads to improved compatibility and comparability of financial statements because similar economic transactions are accounted for similarly (Flower, 2004). This leads to more profitable information that is more useful to creditors, investors and other users of financial statements.
The adoption and implementation of IFRS will drastically change the philosophy of many companies on how they handle both internal and external reporting activities. This shows that the harmonization of both internal and external reporting under IFRS will result in the highest benefit ever. As demonstrated by Eva (2004), IFRS’ adoption is likely to increase the ability to compare consolidated
Being important to the discipline of accounting, the objectives of IFRS and IAS are to give guidance on the presentation of financial statements. IFRS as issued by International Accounting Standards Boards …show more content…
When developing and revising concepts and standards, the creation does not override or change any existing, but consider relationships with existing standards in order to provide high input. With the merging of IASB and FASB in attempt to develop a comprehensive and common conceptual framework, the focus remains in developing uniform concepts applicable to business entities. The improvement of the concepts leads to more ideas through publications and establishment of a committee such as the Committee on Accounting Procedures (CAP), which was the first standard-setting body. The CAP was created in 1939 by the American Institute of Certified Public Accountant (AICPA) when public losses from the stock market collapse in 1929, (Robert, …show more content…
The move to use IFRS standards was coupled with diverse effects. The demand for global harmonization of accounting principles and standards, as well as approaches leads to the implementation and adoption of influential criteria in internal organization and accounting strategies without reducing standardization of the accounting standards. For instance, the global reporting standard requires countries to apply an international recognized framework such as IFRS and U.S. GAAP when preparing consolidated financial statements. Implementing IFRS should lead to greater international harmonization with respect to the consolidated accounts of the listed companies. Therefore eliminating different methods of accounting for the same transaction leads to improved compatibility and comparability of financial statements because similar economic transactions are accounted for similarly (Flower, 2004). This leads to more profitable information that is more useful to creditors, investors and other users of financial statements.
The adoption and implementation of IFRS will drastically change the philosophy of many companies on how they handle both internal and external reporting activities. This shows that the harmonization of both internal and external reporting under IFRS will result in the highest benefit ever. As demonstrated by Eva (2004), IFRS’ adoption is likely to increase the ability to compare consolidated