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International Financial Reporting Standards (IFRS) are designed as a commonglobal language for business affairs so that company accounts areunderstandable and comparable across international boundaries. They are aconsequence of growing international shareholding and trade and areparticularly important for companies that have dealings in severalcountries. They are progressively replacing the many different national

accounting standards. The rules to be followed by accountants to maintainbooks of accounts which is comparable, understandable, reliable andrelevant as per the users internal or external.IFRS, with the exception of IAS 29 Financial Reporting in HyperinflationaryEconomies and IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized interms of the historical cost paradigm. IAS 29 and IFRIC 7 are authorized interms of the constant purchasing power paradigm.IFRS began as an attempt to harmonize accounting across the European Unionbut the value of harmonization quickly made the concept attractive aroundthe world. They are sometimes still called by the original nameof International Accounting Standards(IAS). IAS were issued between 1973and 2001 by the Board of the International Accounting StandardsCommittee (IASC). On 1 April 2001, the new International AccountingStandards Board (IASB) took over from the IASC the responsibility forsetting International Accounting Standards. During its first meeting thenew Board adopted existing IAS and Standing Interpretations Committeestandards (SICs). The IASB has continued to develop standards calling thenew standards International Financial Reporting Standards.In the absence of a Standard or an Interpretation that specifically applies to a transaction,management must use its judgement in developing and applying an accounting policy that results ininformation that is relevant and reliable. In making that judgement, IAS 8.11 requires management toconsider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income,and expenses in the Framework.

Criticisms of IFRS are (1) that they are not being adopted in the US(see GAAP), (2) a number of criticisms from France and (3) thatIAS 29 FinancialReporting in Hyperinflationary Economies had no positive effect at all during 6years in Zimbabwe´s hyperinflationary economy. The IASB offered responsesto the first two criticisms, but has offered no response to the lastcriticism while IAS 29 is currently (March 2014) being implemented in itsoriginal ineffective form in Venezuela and Belarus.

Contents  [hide] 

1 Objective of financial statements 2 Qualitative characteristics of financial statements 3 Elements of financial statements 4 Recognition of elements of financial statements 5 Measurement of the elements of financial statements 6 Concepts of capital and capital maintenance

o 6.1 Concepts of capitalo 6.2 Concepts of capital maintenance and the determination of profit

7 Requirements 8 Criticisms of IFRS 9 Adoption

o 9.1 Australiao 9.2 Canada

o 9.3 European Uniono 9.4 Indiao 9.5 Japano 9.6 Montenegroo 9.7 Pakistano 9.8 Russiao 9.9 Singaporeo 9.10 South Africao 9.11 Taiwano 9.12 Turkey

10 See also 11 References 12 Further reading 13 External links

Objective of financial statements[edit]Financial statements are a structured representation of the financialposition and financial performance of an entity. The objective of financialstatements is to provide information about the financial position,financial performance and cash flows of an entity that is useful to a widerange of users in making economic decisions. Financial statements also showthe results of the management's stewardship of the resources entrusted toit.[1]

To meet this objective, financial statements provide information about anentity's: (a) assets; (b) liabilities; (c) equity; (d) income and expenses,including gains and losses; (e) contributions by and distributions toowners in their capacity as owners; and (f) cash flows. This information,along with other information in the notes, assists users of financialstatements in predicting the entity's future cash flows and, in particular,their timing and certainty.[1]

The following are the general features in IFRS:

Fair presentation and compliance with IFRS:Fair presentation requires the faithful representation of the effects ofthe transactions, other events and conditions in accordance with thedefinitions and recognition criteria for assets, liabilities, income andexpenses set out in the Framework of IFRS.[2]

Going concern:Financial statements are present on a going concern basis unless managementeither intends to liquidate the entity or to cease trading, or has norealistic alternative but to do so.[3]

Accrual basis of accounting:An entity shall recognise items as assets, liabilities, equity, income andexpenses when they satisfy the definition and recognition criteria forthose elements in the Framework of IFRS.[4]

Materiality and aggregation:Every material class of similar items has to be presented separately. Itemsthat are of a dissimilar nature or function shall be presented separatelyunless they are immaterial.[5]

OffsettingOffsetting is generally forbidden in IFRS.[6] However certain standardsrequire offsetting when specific conditions are satisfied (such as in caseof the accounting for defined benefit liabilities in IAS 19 [7] and the netpresentation of deferred tax liabilities and deferred tax assets in IAS12[8] ).

Frequency of reporting:IFRS requires that at least annually a complete set of financial statementsis presented.[9] However listed companies generally also publish interimfinancial statements (for which the accounting is fully IFRS compliant)forwhich the presentation is in accordance with IAS 34 Interim Financing Reporting.

Comparative information:IFRS requires entities to present comparative information in respect of thepreceding period for all amounts reported in the current period's financialstatements. In addition comparative information shall also be provided fornarrative and descriptive information if it is relevant to understandingthe current period's financial statements.[10] The standard IAS 1 alsorequires an additional statement of financial position (also called a thirdbalance sheet) when an entity applies an accounting policy retrospectivelyor makes a retrospective restatement of items in its financial statements,or when it reclassifies items in its financial statements. This for exampleoccurred with the adoption of the revised standard IAS 19 (as of 1 January2013) or when the new consolidation standards IFRS 10-11-12 were adopted(as of 1 January 2013 or 2014 for companies in the European Union).[11]

Consistency of presentation:IFRS requires that the presentation and classification of items in thefinancial statements is retained from one period to the next unless: (a) itis apparent, following a significant change in the nature of the entity'soperations or a review of its financial statements, that anotherpresentation or classification would be more appropriate having regard tothe criteria for the selection and application of accounting policies inIAS 8; or (b) an IFRS standard requires a change in presentation.[12]

Qualitative characteristics of financial statements[edit]Qualitative characteristics of financial statements include e:

Relevance (Materiality) Faithful representationEnhancing qualitative characteristics include:

Comparability Verifiability Timeliness Understandability

Elements of financial statements[edit]The elements directly related to the measurement of the statement offinancial position include:

Asset : An asset is a resource controlled by the entity as a result ofpast events and from which future economic benefits are expected to flowto the entity.

Liability : A liability is a present obligation of the entity arising fromthe past events, the settlement of which is expected to result in anoutflow from the entity of resources embodying economic benefits, i.e.assets.

Equity : Nominal equity is the nominal residual interest in the nominalassets of the entity after deducting all its liabilities in nominalvalue.[13]

The financial performance of an entity is presented in the statement ofcomprehensive income, which consists of the income statement and thestatement of other comprehensive income [14] (usually presented in twoseparate statements). Financial performance includes the following elements(which are recognised in the income statement or other comprehensive incomeas required by the applicable IFRS standard):

Revenues : increases in economic benefit during an accounting period inthe form of inflows or enhancements of assets, or decrease of liabilitiesthat result in increases in equity. However, it does not include thecontributions made by the equity participants (for example owners,partners or shareholders).

Expenses: decreases in economic benefits during an accounting period in theform of outflows, or depletions of assets or incurrences of liabilitiesthat result in decreases in equity. However, these don't include thedistributions made to the equity participants.[15]

Results recognised in other comprehensive income are limited to thefollowing specific circumstances:

Remeasurements of defined benefit assets or liabilities (as defined in thestandard IAS 19) [16]

Increases or decreases in the fair value of financial assets classified asavailable for sale (with the exception of impairment losses)(as defined inthe standard IAS 39) [17]

Increases or decreases resulting from the application of a revaluation ofproperty, plant and equipment [18] or intangible assets [19]

Exchange differences resulting from the translation of foreign operations(subsidiary, associate, joint arrangement or branch of a reporting entity,the activities of which are conducted in a country or currency other thanthose of the reporting entity[20]) according to the standard IAS 21 [21]

the portion of the gain or loss on the hedging instrument in a cash flowhedge (or a hedge of a net investment in a foreign operation, as this isaccounted similarly [22]) that is determined to be an effective hedge [23]

The statement of changes in equity consists of a reconciliation of thechanges in equity in which the following information is provided:

total comprehensive income for the period, showing separately the totalamounts attributable to owners of the parent and to non-controllinginterests;

for each component of equity, the effects of retrospective application orretrospective restatement recognised in accordance with IAS 8; and

for each component of equity, a reconciliation between the carrying amountat the beginning and the end of the period, separately disclosing changesresulting from:

profit or loss;

other comprehensive income; and

transactions with owners in their capacity as owners, showing separatelycontributions by and distributions to owners and changes in ownershipinterests in subsidiaries that do not result in a loss of control.[24]

Statement of Cash Flows

Operating cash flows: the principal revenue-producing activities of theentity and are generally calculated by applying the indirect method,whereby profit or loss is adjusted for the effects of transaction of a non-cash nature, any deferrals or accruals of past or future cash receipts orpayments, and items of income or expense associated with investing orfinancing cash flows.[25]

Investing cash flows: the acquisition and disposal of long-term assets andother investments not included in cash equivalents. These represent theextent to which expenditures have been made for resources intended togenerate future income and cash flows. Only expenditures that result in arecognised asset in the statement of financial position are eligible forclassification as investing activities.[25]

Financing cash flows: activities that result in changes in the size andcomposition of the contributed equity and borrowings of the entity. Theseare important because they are useful in predicting claims on future cashflows by providers of capital to the entity.[25]

Notes to the Financial Statements: These shall (a) present informationabout the basis of preparation of the financial statements and the specificaccounting policies used;(b) disclose the information required by IFRSsthat is not presented elsewhere in the financial statements; and (c)provide information that is not presented elsewhere in the financialstatements, but is relevant to an understanding of any of them.[26]

Recognition of elements of financial statements[edit]An item is recognized in the financial statements when:[27]

it is probable future economic benefit will flow to or from an entity.

the resource can be reliably measuredIn some cases specific standards add additional conditions beforerecognition is possible or prohibit recognition all together.An example is the recognition of internally generated brands, mastheads,publishing titles, customer lists and items similar in substance, for whichrecognition is prohibited by IAS 38.[28] In addition research and developmentexpenses can only be recognised as an intangible asset if they cross thethreshold of being classified as 'development cost'.[29]

Whilst the standard on provisions, IAS 37, prohibits the recognition of aprovision for contingent liabilities,[30] this prohibition is not applicableto the accounting for contingent liabilities in a business combination. Inthat case the acquirer shall recognise a contingent liability even if it isnot probable that an outflow of resources embodying economic benefits willbe required.[31]

Measurement of the elements of financial statements[edit]Par. 99. Measurement is the process of determining the monetary amounts atwhich the elements of the financial statements are to be recognized andcarried in the balance sheet and income statement. This involves theselection of the particular basis of measurement.Par. 100. A number of different measurement bases are employed to differentdegrees and in varying combinations in financial statements. They includethe following:(a) Historical cost. Assets are recorded at the amount of cash or cashequivalents paid or the fair value of the consideration given to acquirethem at the time of their acquisition. Liabilities are recorded at theamount of proceeds received in exchange for the obligation, or in somecircumstances (for example, income taxes), at the amounts of cash or cashequivalents expected to be paid to satisfy the liability in the normalcourse of business.(b) Current cost. Assets are carried at the amount of cash or cashequivalents that would have to be paid if the same or an equivalent assetwas acquired currently. Liabilities are carried at the undiscounted amountof cash or cash equivalents that would be required to settle the obligationcurrently.

(c) Realisable (settlement) value. Assets are carried at the amount of cashor cash equivalents that could currently be obtained by selling the assetin an orderly disposal. Assets are carried at the present discounted valueof the future net cash inflows that the item is expected to generate in thenormal course of business. Liabilities are carried at the presentdiscounted value of the future net cash outflows that are expected to berequired to settle the liabilities in the normal course of business.Par. 101. The measurement basis most commonly adopted by entities inpreparing their financial statements is historical cost. This is usuallycombined with other measurement bases. For example, inventories are usuallycarried at the lower of cost and net realisable value, marketablesecurities may be carried at market value and pension liabilities arecarried at their present value. Furthermore, some entities use the currentcost basis as a response to the inability of the historical cost accountingmodel to deal with the effects of changing prices of non-monetary assets.

Concepts of capital and capital maintenance[edit]

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Concepts of capital[edit]Par. 102. A financial concept of capital is adopted by most entities inpreparing their financial statements. Under a financial concept of capital,such as invested money or invested purchasing power, capital is synonymouswith the net assets or equity of the entity. Under a physical concept ofcapital, such as operating capability, capital is regarded as theproductive capacity of the entity based on, for example, units of outputper day.Par. 103. The selection of the appropriate concept of capital by an entityshould be based on the needs of the users of its financial statements.Thus, a financial concept of capital should be adopted if the users offinancial statements are primarily concerned with the maintenance ofnominal invested capital or the purchasing power of invested capital. If,however, the main concern of users is with the operating capability of theentity, a physical concept of capital should be used. The concept chosenindicates the goal to be attained in determining profit, even though theremay be some measurement difficulties in making the concept operational.Concepts of capital maintenance and the determination of profit[edit]Par. 104. The concepts of capital in paragraph 102 give rise to thefollowing two concepts of capital maintenance:(a) Financial capital maintenance. Under this concept a profit is earnedonly if the financial (or money) amount of the net assets at the end of theperiod exceeds the financial (or money) amount of net assets at thebeginning of the period, after excluding any distributions to, andcontributions from, owners during the period. Financial capital maintenance

can be measured in either nominal monetary units or units of constantpurchasing power.(b) Physical capital maintenance. Under this concept a profit is earnedonly if the physical productive capacity (or operating capability) of theentity (or the resources or funds needed to achieve that capacity) at theend of the period exceeds the physical productive capacity at the beginningof the period, after excluding any distributions to, and contributionsfrom, owners during the period.The concepts of capital in paragraph 102 give rise to the following threeconcepts of capital during low inflation and deflation:

(A) Physical capital.[32] See paragraph 102&103

(B) Nominal financial capital.[32] See paragraph 104.[33]

(C) Constant item purchasing power financial capital.[32] See paragraph 104.[34]

The concepts of capital in paragraph 102 give rise to the following threeconcepts of capital maintenance during low inflation and deflation:

(1) Physical capital maintenance:[32] optional during low inflation anddeflation. Current Cost Accounting model prescribed by IFRS. See Par 106.

(2) Financial capital maintenance in nominal monetary units (Historicalcost accounting):[32] authorized by IFRS but not prescribed—optional duringlow inflation and deflation. See Par 104 (a) Historical cost accounting.Financial capital maintenance in nominal monetary units per se duringinflation and deflation is a fallacy: it is impossible to maintain the realvalue of financial capital constant with measurement in nominal monetaryunits per se during inflation and deflation.

(3) Financial capital maintenance in units of constant purchasingpower [32]  (Capital Maintenance in Units of Constant Purchasing Power):[35] authorized by IFRS but not prescribed—optional during low inflation anddeflation. See Par 104(a). Capital Maintenance in Units of ConstantPurchasing Power is prescribed during hyperinflation in IAS 29:[36] i.e. therestatement of Historical Cost or Current Cost period-end financialstatements in terms of the period-end monthly published Consumer PriceIndex.[37] Only financial capital maintenance in units of constant purchasingpower (Capital Maintenance in Units of Constant Purchasing Power) in termsof a daily index per se can automatically maintain the real value offinancial capital constant at all levels of inflation and deflation in allentities that at least break even in real value—ceteris paribus—for anindefinite period of time. This would happen whether these entities ownrevaluable fixed assets or not and without the requirement of more capitalor additional retained profits to simply maintain the existing constantreal value of existing shareholders´ equity constant. Financial capitalmaintenance in units of constant purchasing power requires the calculationand accounting of net monetary losses and gains from holding monetary items

during low inflation and deflation. The calculation and accounting of netmonetary losses and gains during low inflation and deflation have thus beenauthorized in IFRS since 1989.Par. 105. The concept of capital maintenance is concerned with how anentity defines the capital that it seeks to maintain. It provides thelinkage between the concepts of capital and the concepts of profit becauseit provides the point of reference by which profit is measured; it is aprerequisite for distinguishing between an entity's return on capital andits return of capital; only inflows of assets in excess of amounts neededto maintain capital may be regarded as profit and therefore as a return oncapital. Hence, profit is the residual amount that remains after expenses(including capital maintenance adjustments, where appropriate) have beendeducted from income. If expenses exceed income the residual amount is aloss.Par. 106. The physical capital maintenance concept requires the adoption ofthe current cost basis of measurement. The financial capital maintenanceconcept, however, does not require the use of a particular basis ofmeasurement. Selection of the basis under this concept is dependent on thetype of financial capital that the entity is seeking to maintain.Par. 107. The principal difference between the two concepts of capitalmaintenance is the treatment of the effects of changes in the prices ofassets and liabilities of the entity. In general terms, an entity hasmaintained its capital if it has as much capital at the end of the periodas it had at the beginning of the period. Any amount over and above thatrequired to maintain the capital at the beginning of the period is profit.Par. 108. Under the concept of financial capital maintenance where capitalis defined in terms of nominal monetary units, profit represents theincrease in nominal money capital over the period. Thus, increases in theprices of assets held over the period, conventionally referred to asholding gains, are, conceptually, profits. They may not be recognised assuch, however, until the assets are disposed of in an exchange transaction.When the concept of financial capital maintenance is defined in terms ofconstant purchasing power units, profit represents the increase in investedpurchasing power over the period. Thus, only that part of the increase inthe prices of assets that exceeds the increase in the general level ofprices is regarded as profit. The rest of the increase is treated as acapital maintenance adjustment and, hence, as part of equity.Par. 109. Under the concept of physical capital maintenance when capital isdefined in terms of the physical productive capacity, profit represents theincrease in that capital over the period. All price changes affecting theassets and liabilities of the entity are viewed as changes in themeasurement of the physical productive capacity of the entity; hence, theyare treated as capital maintenance adjustments that are part of equity andnot as profit.Par. 110. The selection of the measurement bases and concept of capitalmaintenance will determine the accounting model used in the preparation ofthe financial statements. Different accounting models exhibit different

degrees of relevance and reliability and, as in other areas, managementmust seek a balance between relevance and reliability. This Framework isapplicable to a range of accounting models and provides guidance onpreparing and presenting the financial statements constructed under thechosen model. At the present time, it is not the intention of the Board ofIASC to prescribe a particular model other than in exceptionalcircumstances, such as for those entities reporting in the currency of ahyperinflationary economy. This intention will, however, be reviewed in thelight of world developments.[38]

Requirements[edit]Main article: Requirements of IFRS

IFRS financial statements consist of (IAS1.8)

a Statement of Financial Position

a Statement of Comprehensive Income separate statements comprisingan Income Statement and separately a Statement of Comprehensive Income,which reconciles Profit or Loss on the Income statement tototal comprehensive income

a Statement of Changes in Equity (SOCE)

a Cash Flow Statement or Statement of Cash Flows

notes, including a summary of the significant accounting policiesComparative information is required for the prior reporting period (IAS1.36). An entity preparing IFRS accounts for the first time must apply IFRSin full for the current and comparative period although there aretransitional exemptions (IFRS1.7).On 6 September 2007, the IASB issued a revised IAS 1 Presentation ofFinancial Statements. The main changes from the previous version are torequire that an entity must:

present all non-owner changes in equity (that is, 'comprehensiveincome' ) either in one Statement of comprehensive income or in twostatements (a separate income statement and a statement of comprehensiveincome). Components of comprehensive income may not be presented in theStatement of changes in equity.

present a statement of financial position (balance sheet) as at thebeginning of the earliest comparative period in a complete set of financialstatements when the entity applies the new standard.

present a statement of cash flow.

make necessary disclosure by the way of a note.The revised IAS 1 is effective for annual periods beginning on or after 1January 2009. Early adoption is permitted.

Criticisms of IFRS[edit]1. The US Securities and Exchange Commission Staff issued a 127-pagereport stating reasons why not to adopt IFRS in the United States.[39] Thestaff of the IFRS Foundation provided a detailed answer on the maincriticisms in the SEC report.[40]

2. A number of criticisms were voiced in the beginning of 2013 in theFrench media to which the IASB Board member Philippe DANJOU responded inhis document 'AN UPDATE ON INTERNATIONAL FINANCIAL REPORTING STANDARDS(IFRSs).[41]

3. It is widely acknowledged that IAS 29 Financial Reporting in HyperinflationaryEconomies had no positive effect during the six years it was implementedduring hyperinflation in Zimbabwe. [5] This leads people to ask what thepurpose of IAS 29 is when it had no positive effect during hyperinflationin Zimbabwe. IAS 29 is currently (March 2014) being implemented in itsoriginal ineffective form in Venezuela and Belarus. It was suggested to theIASB in 2012 that IAS 29 should be corrected to require daily indexationwhich would result in effective Capital Maintenance in Units of ConstantPurchasing Power (CMUCPP) and would stabilize the non-monetary economyduring hyperinflation.[42] The IASB has offered no response to date (March2014) to this criticism and has not yet corrected IAS 29 to require dailyindexation.

Adoption[edit]IFRS are used in many parts of the world, including the EuropeanUnion, India, Hong Kong, Australia, Malaysia, Pakistan, GCCcountries, Russia, Chile, South Africa, Singaporeand Turkey, but not in theUnited States. As of August 2008, more than 113 countries around the world,including all of Europe, currently require or permit IFRS reporting and 85require IFRS reporting for all domestic, listed companies, according tothe U.S. Securities and Exchange Commission.[43]

It is generally expected that IFRS adoption worldwide will be beneficial toinvestors and other users of financial statements, by reducing the costs ofcomparing alternative investments and increasing the quality ofinformation.[44] Companies are also expected to benefit, as investors will bemore willing to provide financing.[44] Companies that have high levels ofinternational activities are among the group that would benefit from aswitch to IFRS. Companies that are involved in foreign activities andinvesting benefit from the switch due to the increased comparability of aset accounting standard.[45] However, Ray J. Ball has expressed someskepticism of the overall cost of the international standard; he arguesthat the enforcement of the standards could be lax, and the regionaldifferences in accounting could become obscured behind a label. He alsoexpressed concerns about the fair value emphasis of IFRS and the influenceof accountants from non-common-law regions, where losses have beenrecognized in a less timely manner.[44]

To assess progress towards the goal of a single set global accountingstandards, the IFRS Foundation has developed and posted profiles about the

use of IFRSs in individual jurisdictions. These were based on informationfrom various sources. The starting point was the responses provided bystandard-setting and other relevant bodies to a survey that the IFRSFoundation conducted. Currently, profiles are completed for 124jurisdictions, including all of the G20 jurisdictions plus 104 others.Eventually, the plan is to have a profile for every jurisdiction that hasadopted IFRSs, or is on a programme toward adoption of IFRSs.[46]

Australia[edit]The Australian Accounting Standards Board (AASB) has issued 'Australianequivalents to IFRS' (A-IFRS), numbering IFRS standards as AASB 1–8 and IASstandards as AASB 101–141. Australian equivalents to SIC and IFRICInterpretations have also been issued, along with a number of 'domestic'standards and interpretations. These pronouncements replaced previousAustralian generally accepted accounting principles with effect from annualreporting periods beginning on or after 1 January 2005 (i.e. 30 June 2006was the first report prepared under IFRS-equivalent standards for June yearends). To this end, Australia, along with Europe and a few other countries,was one of the initial adopters of IFRS for domestic purposes (in thedeveloped world). It must be acknowledged, however, that IFRS and primarilyIAS have been part and parcel of accounting standard package in thedeveloping world for many years since the relevant accounting bodies weremore open to adoption of international standards for many reasons includingthat of capability.The AASB has made certain amendments to the IASB pronouncements in makingA-IFRS, however these generally have the effect of eliminating an optionunder IFRS, introducing additional disclosures or implementing requirementsfor not-for-profit entities, rather than departing from IFRS for Australianentities. Accordingly, for-profit entities that prepare financialstatements in accordance with A-IFRS are able to make an unreservedstatement of compliance with IFRS.The AASB continues to mirror changes made by the IASB as localpronouncements. In addition, over recent years, the AASB has issued so-called 'Amending Standards' to reverse some of the initial changes made tothe IFRS text for local terminology differences, to reinstate options andeliminate some Australian-specific disclosure. There are some calls forAustralia to simply adopt IFRS without 'Australianising' them and this hasresulted in the AASB itself looking at alternative ways of adopting IFRS inAustralia.Canada[edit]The use of IFRS became a requirement for Canadian publicly accountableprofit-oriented enterprises for financial periods beginning on or after 1January 2011. This includes public companies and other "profit-orientedenterprises that are responsible to large or diverse groups ofshareholders."[47]

European Union[edit]

In 2002 the European Union agreed that from 1 January 2005 InternationalAccounting Standards / International Financial Reporting Standards wouldapply for the consolidated accounts of the EU listed companies.[48]

In order to be approved for use in the EU, standards must be endorsed bythe Accounting Regulatory Committee (ARC), which includes representativesof member state governments and is advised by a group of accounting expertsknown as the European Financial Reporting Advisory Group. As a result IFRSas applied in the EU may differ from that used elsewhere.Parts of the standard IAS 39: Financial Instruments: Recognition andMeasurement were not originally approved by the ARC. IAS 39 wassubsequently amended, removing the option to record financial liabilitiesat fair value, and the ARC approved the amended version. The IASB isworking with the EU to find an acceptable way to remove a remaining anomalyin respect of hedge accounting. The World Bank Centre for FinancialReporting Reform is working with countries in the ECA region to facilitatethe adoption of IFRS and IFRS for SMEs.Whilst the IASB set the effective dates for the new consolidation standardsIFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS12 Disclosure of Interests in Other Entities at the 1st of January 2013, the ARC decidedto delay the mandatory effective date for the companies listed in theEuropean Union by one year. The standards therefore only became effectiveon the 1st of January 2014.[49]

The European Commission has launched a general analysis of the impacts of 8years of use of international financial reporting standards (IFRSs) in theEU for preparers and users of financial statements from the private sector.The study will include an overall assessment of whether the Regulation1606/2002 of the European Parliament and the Council ('IAS Regulation') hasmet the two-fold initial objectives of ensuring a high degree oftransparency and comparability of the financial statements of Europeancompanies and an efficient functioning of the market, in comparison withthe situation before IFRS implementation in 2005. It will also include acost-benefit analysis and an assessment and analysis of the benefits anddrawbacks brought by the IAS Regulation for different stakeholder groups.[50]

India[edit]The (ICAI) has announced that IFRS will be mandatory in India for financialstatements for the periods beginning on or after 1 April 2012, but thisplan has been failed and IFRS/IND-AS (Converged IFRS) are still notapplicable. There was a roadmap as given below but still Indian companiesare following old Indian GAAP. There is no clear new date of adoption ofIFRS.Reserve Bank of India has stated that financial statements of banks need tobe IFRS-compliant for periods beginning on or after 1 April 2011.The ICAI has also stated that IFRS will be applied to companies above INR1000 crore (INR 10 billion) from April 2011. Phase wise applicabilitydetails for different companies in India:

Phase 1: Opening balance sheet as at 1 April 2011*i. Companies which are part of NSE Index – Nifty 50ii. Companies which are part of BSE Index – Sensex 30a. Companies whose shares or other securities are listed on a stockexchange outside Indiab. Companies, whether listed or not, having net worth of more than INR 1000crore (INR 10 billion)Phase 2: Opening balance sheet as at 1 April 2012*Companies not covered in phase 1 and having net worth exceeding INR 500crore (INR 5 billion)Phase 3: Opening balance sheet as at 1 April 2014*Listed companies not covered in the earlier phases * If the financial yearof a company commences at a date other than 1 April, then it shall prepareits opening balance sheet at the commencement of immediately followingfinancial year.On 22 January 2010, the Ministry of Corporate Affairs issued the road mapfor transition to IFRS. It is clear that India has deferred transition toIFRS by a year. In the first phase, companies included in Nifty 50 or BSESensex, and companies whose securities are listed on stock exchangesoutside India and all other companies having net worth of INR 10 billionwill prepare and present financial statements using Indian AccountingStandards converged with IFRS. According to the press note issued by thegovernment, those companies will convert their first balance sheet as at 1April 2011, applying accounting standards convergent with IFRS if theaccounting year ends on 31 March. This implies that the transition datewill be 1 April 2011. According to the earlier plan, the transition datewas fixed at 1 April 2010.The press note does not clarify whether the full set of financialstatements for the year 2011–12 will be prepared by applying accountingstandards convergent with IFRS. The deferment of the transition may makecompanies happy, but it will undermine India's position. Presumably, lackof preparedness of Indian companies has led to the decision to defer theadoption of IFRS for a year. This is unfortunate that India, which boastsfor its IT and accounting skills, could not prepare itself for thetransition to IFRS over last four years. But that might be the groundreality.Transition in phasesCompanies, whether listed or not, having net worth of more than INR5 billion will convert their opening balance sheet as at 1 April 2013.Listed companies having net worth of INR 5 billion or less will converttheir opening balance sheet as at 1 April 2014. Un-listed companies havingnet worth of Rs5 billion or less will continue to apply existing accountingstandards, which might be modified from time to time. Transition to IFRS inphases is a smart move.The transition cost for smaller companies will be much lower because largecompanies will bear the initial cost of learning and smaller companies will

not be required to reinvent the wheel. However, this will happen only if asignificant number of large companies engage Indian accounting firms toprovide them support in their transition to IFRS. If, most large companies,which will comply with Indian accounting standards convergent with IFRS inthe first phase, choose one of the international firms, Indian accountingfirms and smaller companies will not benefit from the learning in the firstphase of the transition to IFRS.It is likely that international firms will protect their learning to retaintheir competitive advantage. Therefore, it is for the benefit of thecountry that each company makes judicious choice of the accounting firm asits partner without limiting its choice to international accounting firms.Public sector companies should take the lead and the Institute of CharteredAccountants of India (ICAI) should develop a clear strategy to diffuse thelearning.Size of companiesThe government has decided to measure the size of companies in terms of networth. This is not the ideal unit to measure the size of a company. Networth in the balance sheet is determined by accounting principles andmethods. Therefore, it does not include the value of intangible assets.Moreover, as most assets and liabilities are measured at historical cost,the net worth does not reflect the current value of those assets andliabilities. Market capitalisation is a better measure of the size of acompany. But it is difficult to estimate market capitalisation orfundamental value of unlisted companies. This might be the reason that thegovernment has decided to use 'net worth' to measure size of companies.Some companies, which are large in terms of fundamental value or whichintend to attract foreign capital, might prefer to use Indian accountingstandards convergent with IFRS earlier than required under the road mappresented by the government. The government should provide that choice.[51]

Japan[edit]The minister for Financial Services in Japan announced in late June 2011that mandatory application of the IFRS should not take place from fiscalyear-ending March 2015; five to seven years should be required forpreparation if mandatory application is decided; and to permit the use ofU.S. GAAP beyond the fiscal year ending 31 March 2016.[52]

Montenegro[edit]Montenegro gained independence from Serbia in 2006. Its accounting standardsetter is the Institute of Accountants and Auditors of Montenegro (IAAM).[53]:2 In 2005, IAAM adopted a revised version of the 2002 "Law on Accountingand Auditing" which authorized the use of IFRS for all entities.[53]:18 IFRSis currently required for all consolidated and standalone financialstatements, however, enforcement is not effective except in the bankingsector.[53]:18 Financial statements for banks in Montenegro are, generally, ofhigh quality and can be compared to those of the European Union.[53]:3 Foreigncompanies listed on Montenegro's two stock exchanges (Montenegro StockExchange and NEX Stock Exchange) are also required to apply IFRS in theirfinancial statements.[54] Montenegro does not have a national GAAP.[53]:18 Currently, no Montenegrin translation of IFRS exists, and because of

this Montenegro applies the Serbian translation from 2010.[55]:20 IFRSfor SMEs is not currently applied in Montenegro.[55]:20

Pakistan[edit]All listed companies must follow all issued IAS/IFRS except the following:IAS 39 and IAS 42: Implementation of these standards has been held inabeyance by State Bank of Pakistan for Banks and DFIsIFRS-1: Effective for the annual periods beginning on or after 1 January2004. This IFRS is being considered for adoption for all companies otherthan banks and DFIs.IFRS-9: Under consideration of the relevant Committee of the Institutes(ICAP & ICMAP). This IFRS will be effective for the annual periodsbeginning on or after 1 January 2013.Russia[edit]The government of Russia has been implementing a program to harmonizeits national accounting standards with IFRS since 1998. Since then twentynew accounting standards were issued by the Ministry of Finance of theRussian Federation aiming to align accounting practices with IFRS. Despitethese efforts essential differences between Russian accounting standardsand IFRS remain. Since 2004 all commercial banks have been obliged toprepare financial statements in accordance with both Russian accountingstandards and IFRS. Full transition to IFRS is delayed but starting 2012new modifications making Russian GAAP converging to IFRS have been made.They notably include the booking of reserves for bad debts and contingentliabilities and the devaluation of inventory and financial assets.Still, several differences between the two sets of account still remain.Major reasons for deviation between Russian GAAP and IFRS / US-GAAP (e.g.when the Russian affiliate of a larger group need to be consolidated to themother company) are the following:1) Booking of payables in the General Ledger according to nationalaccounting standards can only be made upon receipt of the actual acceptanceprotocol (good's receipt). Indeed in Russia, in contrast to IFRS and US-GAAP, the invoice (outgoing or incoming) is not an official tax oraccounting document and does not trigger any booking. There is also noprovision to book in the General Ledger any expense for goods and servicesthat according to a contract are effectively received but for whomdocuments are still not exchanged.2) There is no possibility under Russian GAAP to recognise the good-will asan intangible asset in the balance sheet of a company. This has a majorconsequence when a company is sold. Indeed, if a company (or part of it) issold at a higher value than its book value (i.e. to account for the good-will value), the selling party need to pay tax at the relevant profit taxrate (20% in 2013) on the difference in value between selling andaccounting value and the buyer has no possibility to ammortize the cost anddeduct it from present and future revenues.3) There is no equivalent of IAS 37 in the Russian GAAP. Loans and monetarysecurities are not discounted, so the present value of such financial

assets is not discounted for the relevant interest rates at the differentmaturities of the loans.Singapore[edit]In Singapore the Accounting Standards Committee (ASC) is in charge ofstandard setting. Singapore closely models its Financial ReportingStandards (FRS) according to the IFRS, with appropriate changes made tosuit the Singapore context. Before a standard is enacted, consultationswith the IASB are made to ensure consistency of core principles.[56]

South Africa[edit]All companies listed on the Johannesburg Stock Exchange have been requiredto comply with the requirements of International Financial ReportingStandards since 1 January 2005.The IFRS for SMEs may be applied by 'limited interest companies', asdefined in the South African Corporate Laws Amendment Act of 2006 (that is,they are not 'widely held'), if they do not have public accountability(that is, not listed and not a financial institution). Alternatively, thecompany may choose to apply full South African Statements of GAAP or IFRS.South African Statements of GAAP are entirely consistent with IFRS,although there may be a delay between issuance of an IFRS and theequivalent SA Statement of GAAP (can affect voluntary early adoption).Taiwan[edit]Adoption scope and timetable(1) Phase I companies: listed companies and financial institutionssupervised by the Financial Supervisory Commission (FSC), except for creditcooperatives, credit card companies and insurance intermediaries:A. They will be required to prepare financial statements in accordance withTaiwan-IFRS starting from 1 January 2013.B. Early optional adoption: Firms that have already issued securitiesoverseas, or have registered an overseas securities issuance withthe FSC, or have a market capitalization of greater than NT$10 billion,will be permitted to prepare additional consolidated financial statements[TW-

original 1] in accordance with Taiwan-IFRS starting from 1 January 2012. If acompany without subsidiaries is not required to prepare consolidatedfinancial statements, it will be permitted to prepare additional individualfinancial statements on the above conditions.(2) Phase II companies: unlisted public companies, credit cooperatives andcredit card companies:A. They will be required to prepare financial statements in accordance withTaiwan-IFRS starting from 1 January 2019B. They will be permitted to apply Taiwan-IFRS starting from 1 January2013.(3) Pre-disclosure about the IFRS adoption plan, and the impact of adoptionTo prepare properly for IFRS adoption, domestic companies should propose anIFRS adoption plan and establish a specific taskforce. They should also

disclose the related information from 2 years prior to adoption, asfollows:A. Phase I companies:(A) They will be required to disclose the adoption plan, and the impact ofadoption, in 2011 annual financial statements, and in 2012 interim andannual financial statements.(B) Early optional adoption:a. Companies adopting IFRS early will be required to disclose the adoptionplan, and the impact of adoption, in 2010 annual financial statements, andin 2011 interim and annual financial statements.b. If a company opts for early adoption of Taiwan-IFRS after 1 January2011, it will be required to disclose the adoption plan, and the impact ofadoption, in 2011 interim and annual financial statements commencing on thedecision date.B. Phase II companies will be required to disclose the related informationfrom 2 years prior to adoption, as stated above.

Jump up^ To maintain the consistency of information declaration andsupervision with other companies, the early adopted companies should stillprepare individual and consolidated financial statements in accordance withdomestic accounting standards.Year Work Plan2008

Establishment of IFRS Taskforce2009~2011

Acquisition of authorization to translate IFRS

Translation, review, and issuance of IFRS

Analysis of possible IFRS implementation problems, and resolution thereof

Proposal for modification of the related regulations and supervisorymechanisms

Enhancement of related publicity and training activities2012

IFRS application permitted for Phase I companies

Study on possible IFRS implementation problems, and resolution thereof

Completion of amendments to the related regulations and supervisorymechanisms

Enhancement of the related publicity and training activities

2013

Application of IFRS required for Phase I companies, and permitted for PhaseII companies

Follow-up analysis of the status of IFRS adoption, and of the impact2014

Follow-up analysis of the status of IFRS adoption, and of the impact2015

Applications of IFRS required for Phase II companiesExpected benefits(1) More efficient formulation of domestic accounting standards,improvement of their international image, and enhancement of the globalrankings and international competitiveness of our local capital markets;(2) Better comparability between the financial statements of local andforeign companies;(3) No need for restatement of financial statements when local companieswish to issue overseas securities, resulting in reduction in the cost ofraising capital overseas;(4) For local companies with investments overseas, use of a single set ofaccounting standards will reduce the cost of account conversions andimprove corporate efficiency.Above is quoted from Accounting Research and Development Foundation, withthe original here PDF (18.9 KB) .Turkey[edit]Turkish Accounting Standards Board translated IFRS into Turkish in 2005.Since 2005 Turkish companies listed in Istanbul Stock Exchange are requiredto prepare IFRS reports.

See also[edit]

List of International Financial Reporting Standards

Chinese accounting standards

Philosophy of Accounting

International Public Sector Accounting Standards

Indian Accounting Standards

Generally Accepted Accounting Principles (Canada)

Generally Accepted Accounting Principles (France)

Generally Accepted Accounting Principles (UK)

Generally Accepted Accounting Principles (United States)

Philosophy of accounting

Capital (economics)

Center for Audit Quality (CAQ)

Constant Purchasing Power Accounting

References[edit]

^ Jump up to:a b Paragraph 9 of the standard IAS 1

Jump up^ Paragraph 15 of the standard IAS 1

Jump up^ Paragraph 25 of the standard IAS 1

Jump up^ Paragraph 28 of the standard IAS 1

Jump up^ Paragraph 29 of the standard IAS 1

Jump up^ Paragraph 32 of the standard IAS 1

Jump up^ Paragraph 57, 63 of the standard IAS 19

Jump up^ Paragraph 71 of the standard IAS 12

Jump up^ Paragraph 36 of the standard IAS 1

Jump up^ Paragraph 38 of the standard IAS 1

Jump up^ Paragraph 10f of the standard IAS 1

Jump up^ Paragraph 45 of the standard IAS 1

Jump up^ Paragraph 4.4 of the Framework of IFRS

Jump up^ Paragraph 10A of the standard IAS 1

Jump up^ Paragraph 4.25 of the Framework of IFRS

Jump up^ Paragraph 120 of the standard IAS 19

Jump up^ Paragraph 55b of the standard IAS 39

Jump up^ Paragraph 39 of the standard IAS 16

Jump up^ Paragraph 85 of the standard IAS 38

Jump up^ Paragraph 8 of the standard IAS 21

Jump up^ Paragraph 39 of the standard IAS 21

Jump up^ Paragraph 102 of the standard IAS 39

Jump up^ Paragraph 95 of the standard IAS 39

Jump up^ Paragraph 106 of the standard IAS 1

^ Jump up to:a b c http://eifrs.ifrs.org/eifrs/bnstandards/en/2013/ias7.pdf

Jump up^ http://eifrs.ifrs.org/eifrs/bnstandards/en/2013/ias1.pdf

Jump up^ Paragraph 4.38 of the Conceptual Framework of IFRS

Jump up^ Paragraph 63 of the IFRS standard IAS 38

Jump up^ Paragraphs 54 and 57 of the IFRS standard IAS 38

Jump up^ Paragraph 27 of the IFRS standard IAS 37

Jump up^ Paragraph 23 of the IFRS standard IFRS 3

^ Jump up to:a b c d e f [1] Smith, N.J. (2012) CONSTANT ITEM PURCHASING POWERACCOUNTING per IFRS, Ch. 1.22.2 Three Concepts of Capital Maintenance

Jump up^ Historical cost accounting

Jump up^ Constant Purchasing Power Accounting

Jump up^ http://www.amazon.com/dp/B008LAC0FE?keywords=constant+item+purchasing+power+accounting+per+ifrs

Jump up^ http://www.iasb.org/IFRSs/IFRs.htm

Jump up^ [2] Framework for the Preparation and Presentation of FinancialStatements, Par 104

Jump up^ [3] Full text of the Framework

Jump up^ http://blogs.wsj.com/cfo/2012/07/13/sec-staff-offers-127-pages-of-reasons-not-to-adopt-ifrs/

Jump up^ http://www.ifrs.org/Alerts/PressRelease/Pages/IFRS-Foundation-Staff-Analysis-of-SEC-Final-Staff-Report-on-IFRS.aspx

Jump up^ http://www.ifrs.org/Features/Documents/Mise-au-point-concernant-les-normes-IFRS-19-eng-February-2013.pdf

Jump up^ [4]

Jump up^ "SEC Proposes Roadmap Toward Global Accounting Standards to HelpInvestors Compare Financial Information More Easily" (Press release). U.S.Securities and Exchange Commission. 28 August 2008. Retrieved 27 August2008.

^ Jump up to:a b c Ball R. (2006). International Financial ReportingStandards (IFRS): pros and cons for investors. Accounting and Business Research

Jump up^ Bradshaw, M., et al (2010). Response to the SEC's Proposed Rule-Roadmap for the Potential Use of Financial Statements Prepared inAccordance with International Financial Reporting Standards (IFRS) by U.S.Issuers. Accounting Horizons(24)1

Jump up^ Profiles of the IFRS Foundation

Jump up^ "AcSB Confirms Changeover Date to IFRSs". Canadian Institute ofChartered Accountants. 13 February 2008. Retrieved 8 August 2009.

Jump up^ http://ec.europa.eu/internal_market/accounting/legal_framework/ias_regulation/index_en.htm

Jump up^ http://www.efrag.org/Front/c1-306/Endorsement-Status-Report_EN.aspx

Jump up^ http://ted.europa.eu/udl?uri=TED:NOTICE:202159-2013:DATA:EN:HTML&tabId=3

Jump up^ Ashish K Bhattacharyya (8 February 2010). "IFRS: transition datewill be april 1, 2011". Business Standard. Retrieved 2 August 2013.

Jump up^ Update: IFRS Developments Japan, October 2011

^ Jump up to:a b c d e van der Plaats, Erik; Nagy, David; Crnomarkovic,Aleksandar; Grabner, Gerhard; Kogler, Gerald; Hodgson, Eddie; Corrigan,Patrick; McEntee, Edward (2007). "Report on the Observance of Standards andCodes (ROSC): The Republic of Montenegro". World Bank.

Jump up^ PricewaterhouseCoopers (2010). "Montenegro". Retrieved 21 June2012.

^ Jump up to:a b IFAC (2011). "Action Plan: Montenegro". Retrieved 21 June2012.

Jump up^ Process of Prescribing Accounting Standards, Retrieved 29 February2008

Further reading[edit]

International Accounting Standards Board (2007): International Financial ReportingStandards 2007 (including International Accounting Standards (IAS(tm)) and Interpretations as at 1January 2007), LexisNexis, ISBN 1-4224-1813-8

Original texts of IAS/IFRS, SIC and IFRIC adopted by the Commission of theEuropean Communities and published in Official Journal of the EuropeanUnionhttp://ec.europa.eu/internal_market/accounting/ias_en.htm#adopted-commission

Case studies of IFRSimplementation in Brazil, Germany, India, Jamaica, Kenya, Pakistan, SouthAfrica and Turkey. Prepared by the United NationsIntergovernmental WorkingGroup of Experts on International Standards of Accounting and Reporting(ISAR).

Wiley Guide to Fair Value Under IFRS [6], John Wiley & Sons.

External links[edit]

The International Accounting Standards Board—Free access to all IFRSstandards, news and status of projects in progress

PwC IFRS page with news and downloadable documents

The latest IFRS news and resources from the Institute of CharteredAccountants in England and Wales (ICAEW)

Initial publication of the International Accounting Standards in theOfficial Journal of the European Union PB L 261 13-10-2003

Directorate Internal Market of the European Union on the implementation ofthe IAS in the European Union

Deloitte: An Overview of International Financial Reporting Standards

The American Institute of CPAs (AICPA) in partnership with its marketingand technology subsidiary, CPA2Biz, has developed the IFRS.com web site.

RSM Richter IFRS page with news and downloadable documents related to IFRSConversions in Canada

U.S. Securities and Exchange Commission Proposal for First-Time Applicationof International Financial Reporting Standards by Foreign private issuersregistered with the SEC

IFRS for SMEs Presented by Michael Wells, Director of the IFRS EducationInitiative at the IASC Foundation

Pricewaterhousecoopers's map of countries that apply IFRS

[hide]V T E International Financial Reporting Standards and Related Accounting

Organizations

IFRS FoundationInternational Accounting Standards Board

Predecessors International Accounting Standards Committee

Selected standards

IFRS

124591011121315

IAS

12781016193739

List of standards

IFRS FoundationFrom Wikipedia, the free encyclopedia

IFRS Foundation

Purpose Development and promotion ofaccounting standards[1]

Headquarters London,   UK

ExecutiveDirector

Yael Almog[2]

Website www.ifrs.org

Formerlycalled

IASC Foundation

Accounting

Historical cost accounting

Constant purchasing power accounting

Management accounting

Tax accounting

Major types of accounting[show]

Auditing[show]

People and organizations[show]

Development[show]

 Business portal

V T E

The International Financial Reporting Standards Foundation, or IFRS Foundation, isa non profit accounting organization. Its main objectives include the development andpromotion of the International Financial Reporting Standards (IFRSs) through theInternational Accounting Standards Board (IASB), which it oversees.[1][3]

The foundation was formerly named the International Accounting StandardsCommittee (IASC) Foundation until a renaming on 1 July 2010, and as of 2012 isgoverned by a board of 22 trustees.[4]

Contents  [show] 

Activities[edit]Standard-setting[edit]The IFRS Foundation sets out the IFRSs and their interpretations, which include thefollowing:

the International Financial Reporting Standards (IFRSs);

the International Accounting Standards (IASs);

the International Financial Reporting Standards Interpretations (IFRICs); and

the Standing Interpretation Committee interpretations (SICs).Of these, the IASs and SICs are previously-developed standards and interpretationsthat have been adopted by the IASB and IFRS Interpretations Committee respectively.[5] The IFRSs are developed and published by the IASB, the 15-member standard-settingbody of the IFRS Foundation, while the IFRICs are provided by the IFRS InterpretationsCommittee.[1]

Via the IASB, the IFRS Foundation also sets out the IFRS for small and medium-sizedentities (SMEs) to better meet the needs of SMEs and relieve the burden imposed onthem by the full IFRSs.[6] At a 2012 panel discussion co-sponsored by the AmericanInstitute of Certified Public Accountants and the Institute of Chartered Accountantsof Scotland, Sir David Tweedie said that the IFRS for SMEs "has been a howlingsuccess" and that 70 million businesses are using it globally, although otherpanelists expressed doubts about its ability to solve problems in certain areas.[7]

IFRS Taxonomy[edit]

The IFRS Foundation also develops and maintains the IFRS Taxonomy, which is therepresentation of the IFRSs in eXtensible Business Reporting Language (XBRL), via itsXBRL team. The team is supported by the XBRL Advisory Council and the XBRL QualityReview Team, which respectively provide strategic advice and reviews developedtaxonomies.[8] Additionally, in 2012 the foundation issued a call for industryparticipants in a project to develop "common industry practice concepts" for thetaxonomy.[9]

XBRL provides a "common, electronic format for business and financial reporting",[10] which will contribute to the global convergence of accounting standards towardsIFRS;[11]the director of XBRL activities at the IFRS Foundation, Olivier Servais, hopesthat "everybody will be using it" in future.[12] As of March 2012, the IFRS Taxonomieshave "considerably fewer" tags than GAAP taxonomies, and the Security and ExchangeCommission has not approved the IFRS Taxonomy for use in XBRL filings in the UnitedStates.[13]

About the IFRS Foundation and the IASB

The IFRS Foundation is an independent, not-for-profit organisation working in the public interest. Ourprimary mission is to develop a single set of high quality, understandable, enforceable and globallyaccepted International Financial Reporting Standards (IFRS)based upon clearly articulated principles.IFRS are developed by the International Accounting Standards Board (IASB), the independent standard-settingbody of the IFRS Foundation.For a quick overview of the organisation, read our guide to the IFRS Foundation, 'Who we are and what wedo' (available in 9 languages).The following pages provide further information on the structure and role of the various elements of theIFRS Foundation, its standard-setting body the IASB, the IASB's formal advisory body, the IFRS AdvisoryCouncil, and the independent Monitoring Board. 

IFRS FoundationThe IFRS Foundation is the oversight body of the IASB and includes governance andoversight, undertaken by the Trustees, and support operations.arrow

IASBThe International Accounting Standards Board is the independent standard-setting body of theIFRS Foundation, including technical staff and advisory bodies composed of international experts.

 

arrow

Monitoring BoardThe Monitoring Board provides a formal link between the Trustees of the IFRSFoundation and public authorities in order to enhance the public accountability of the IFRS Foundation. 

 

arrow

IFRS Advisory CouncilThe IFRS Advisory Council is the formal advisory body to the IASB and theTrustees of the IFRS Foundation.

 

arrow

  

The IFRS Foundation

The primary mission of the IFRS Foundation is to develop, in the public interest, a single set of highquality, understandable, enforceable and globally accepted financial reporting standards based upon clearlyarticulated principles.The principal objectives of the IFRS Foundation are:

to develop these International Financial Reporting Standards (IFRS) through its standard-setting body,the International Accounting Standards Board (IASB);

to promote the use and rigorous application of those Standards;

to take account of the financial reporting needs of emerging economies and small and medium-sizedentities (SMEs); and

to promote and facilitate adoption of IFRS, being the Standards and Interpretations issued by the IASB,through the convergence of national accounting standards and IFRS.

 The functions of the IFRS Foundation can be divided into two main areas:  

Governance and oversight Here you will find information on our governance and public accountability structures, including our Trustees, Annual reports, Strategy Review and IFRS Foundation policies.

 

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Operations Here you will find information on the IFRS Foundation's Senior staff, Funding, Media contacts and photos; publications adoption, translation and Intellectual Property; and Careers with theIFRS Foundation.  

 

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 Related information

For a quick overview of the organisation, read our guide to the IFRS Foundation, 'Who we are and what wedo' (available in 9 languages)

What are International Financial Reporting Standards (IFRS)?

About the IASB

 

 © IFRS Foundation.

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Terms & Conditions

Sitemap

Organisation history

The IFRS Foundation and the IASB were established in 2001 in order to develop a single set of high quality,understandable, enforceable and globally accepted financial reporting standards based upon clearlyarticulated principles. The below highlights some notable developments since then.For more detailed information on adoption of IFRS around the world, see our Jurisdiction profiles.

OSR Journal of Business and Management (IOSR-JBM)

e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 14, Issue 5 (Nov. - Dec.2013), PP 16-24

www.iosrjournals.org

www.iosrjournals.org 16 | Page

Awareness of International Financial Reporting Standards

(IFRS): A study of Post- Graduate Students of Commerce &

Management in Kashmir

Aabida Akhter1

1

(Research Scholar, Department of Business and Financial Studies, Universityof Kashmir, J&K, India)

Abstract: The Institute of Chartered Accountants of India (ICAI) hasannounced its decision to adopt IFRS in

India with effect from 1 April, 2011. The standards will have a significantimpact on capital markets but

students and investors know remarkably little about these standards. ManyEuropean countries shifted to IFRS

as early as 2005. They are ahead of India in including IFRS in thecurriculum for students. An understanding of

Indian Generally Accepted Accounting Principles (GAAP) and IFRS standardsis an urgent need for today’s

students. The commerce and management post- graduates are the futureaccounting professionals working in

various companies s; thus, they must be aware about the newer concepts inaccounting. In this backdrop, the

study seeks to explore the degree of awareness about the newer concept ofaccounting standards called as the

International Financial Reporting Standards (IFRS) amongst students ofCommerce and Management in

Kashmir.

Keywords: Indian GAAP; ICAI, IFRS, awareness, convergence

I. Introduction

Accounting has been integral function of micro and macro institutions. Asan efficient tool of financial

assessment, accounting is used in both households and corporate businessunits. It serves as a mode of

communication to those who are interested in it .In India financialstatements are prepared and guided by the

accounting thought , regulations and standards issued and prescribed byInstitute of Chartered Accountants of

India (ICAI) in consultation with National Advisory committee on AccountingStandards (NACAS) . Propelled

by the internationalization and globalization at an economic andorganization level, the body of knowledge of

accounting has expanded widely. Financial reporting is changing, accountinghas always been a reactive service,

changing and developing to meet the practical needs created by theenvironment in which it operates. These

common set of ground rules enhance comparability and help reduce frauds andmisrepresentation but they do

not necessarily lead to the type of reports that would be most useful ininternal decision making. For example if

a company wants to sell land to finance a new store, they need to know thecurrent market value of the land.

However, GAAP requires that the land be stated at its original, historicalcost in the financial reports. The more

relevant data for decision making- the current market value is ignoredunder GAAP. In view of the various

limitations of GAAP, most companies throughout the world are nowcommunicating with their stakeholders

using a different set of rules called International Financial ReportingStandards (IFRS). IFRS is a set of

international accounting standards stating how particular types oftransactions and other events should be

reported in financial statements. The International Financial ReportingStandards (IFRSs) issued by the

International Accounting Standards Board (IASB) are increasingly beingrecognised as Global Reporting

Standards. The Institute of Chartered Accountants of India (ICAI) hasproposed a plan for convergence with

International Financial Reporting Standards (IFRS) for certain definedentities (listed entities, banks and

insurance entities and certain other large-sized entities) with effect fromaccounting periods commencing on or

after 1 April 2011. Statutory bodies/universities in India, who combineIFRS successfully into the course

curriculum, will help students acquire significant competitive advantagesin the career market. In India, courses

in accounting and commerce are offered in management schools anduniversities where foundation,

undergraduate, post-graduate and doctoral degree courses are taught. Thetwo main professional bodies–

Institute of Charted Accountants of India (ICAI) and The Institute ofCompany Secretaries of India (ICSI), play

a prominent role in incorporating international standards into accountingeducation. At present a Certificate

Course on International Financial Reporting Standards is provided by ICAI.While the initial training for IFRS

may come from regulators and international accounting firms, managementschools and universities will

eventually need to address these international standards. As futureaccounting professionals, commerce and

management students must be aware new developments in this field. Knowledgeof IFRS will make them

understand better the information presented in financial statements ofcompanies. It will also make them aware

of expected changes in financial accounting and the reporting rules of thenew standards, and understand the

implications of such changes for business entities and users of financialstatements.Awareness of International Financial Reporting Standards (IFRS)among Post- Graduate Students of

www.iosrjournals.org 17 | Page

II. Literature Review

A number of researchers have tried assessing the awareness of newer conceptof accounting and the

impact of convergence of Indian accounting standards with the internationalfinancial reporting standards.

KPMG India, 2009 conducted a survey in India and concluded that“implementation of IFRS requires changes

to the regulatory environment, requires large pool of IFRS trained andexperienced resources; and requires

educating and communicating effectively with investors, analysts and Boardof Directors. Samir S. Mogul

International community has long back recognized the need for movingtowards harmonization of the

accounting standard across the globe. Obviously an individual country isalways entitled to customize the

existing international accounting Standards according to its specificneeds. Among other advantages of

harmonization of accounting standards, the two benefits which tops the listare (a) systematic review and

evaluation of the performance of the multinational company havingsubsidiaries and associates in various

countries wherein each country has its own set of GAAP and (b) It providesa level playing fields where no

country is advantaged or disadvantaged because of its GAAP.. D’souza,Dolphy, 2009, “stated that regulatory

approvals are must for the successful implementation of IFRS in India andso the Reserve Bank of India (RBI),

Indian Banking Association (IBA) should align their policies according tothe requirements of the international

standards.” The available literature on IFRS and its implementation coversthe data from mainly European

Union. Few studies have been carried out analyzing the data from othercountries. With conversion to IFRS

expected but not definite, many professors are troubled discerning the“how, when, and what” of incorporating

IFRS into today’s Accounting curriculum (Nilsen, 2008). This studyidentifies some problems in the accounting

curricula of business information at the high school level and suggestsimprovements needed in the accounting

textbooks. Working on the data of European firms, Armstrong et al (2010)found out a positive reaction to IFRS

adoption events for firms with high quality pre adoption information,consistent with investors expecting net

convergence benefits from IFRS adoption. In his study of 1084 EuropeanUnion firms during the period of

(1995-2006), Siqi Li (2010) concluded that on average, the IFRS mandatesignificantly reduces the cost of

equity for mandatory adopters. He also suggested in his research that thisreduction is present only in countries

with strong legal enforcement and that increased disclosures and enhancedinformation comparability are two

mechanisms behind the cost of equity reduction. Cai & Wong (2010) in theirstudy of global capital markets

summarized that the capital markets of the countries that have adopted IFRShave higher degree of integration

among them after their IFRS adoption as compared to the period before theadoption. Paananen & Lin (2009)

gave a contrary view to prior research that IFRS adoption ensures betterquality of accounting information.

Their analysis of German companies reporting showed that accountinginformation quality has worsened with

the adoption of IFRS over time. They also suggested that this developmentis less likely to be driven by new

adopters of IFRS but is driven by the changes of standards. Lantto &Sahlstrom (2009) in their study of key

financial ratios of companies of Finland found that the adoption of IFRSchanges the magnitude of the key

accounting ratios. The study also showed that the adoption of Fair ValueAccounting rules and stricter

requirements on certain Accounting issues are the reasons for the changesobserved in Accounting Figures and

financial ratios. Chand & White (2007) in their paper on convergence ofDomestic Accounting Standards and

IFRS, demonstrated that the influence of Multinational Enterprises andlarge international accounting firms can

lead to transfer of economic resources in their favour, wherein the publicinterests are usually ignored.Barth et al

(2008) in their study of financial data of firms from 21 countries examinedwhether application of IAS/IFRS is

associated with higher accounting quality. The findings of the studyconfirmed that firms applying IAS/IFRS

evidence less earnings management, more timely loss recognition and morerelevance of accounting numbers.

The study also found out that the Firms applying IAS/IFRS experienced animprovement in accounting quality

between the pre-adoption and post adoption period. Elena et al (2009) intheir article dealing with the issues of

convergence between US Generally Accepted Accounting Principles (GAAP) andIFRS were of the opinion that

the adoption of IFRS in the USA undoubtedly would mark a significant changefor many US companies. It

would require a shift to a more principles-based approach, place forgreater reliance on management (and

auditor) judgment, and spur major changes in company processes and systems.Ali & Ustundag (2009) in their

paper on development process of Financial Reporting Standards around theWorld and its practical results in a

developing country, Turkey. They observe that Turkey has encounteredseveral complications in adaption of

IFRS such as complex structure of the International standards, potentialknowledge shortfalls and other

difficulties in application and enforcement issues. Epstein (2009) in hisarticle on Economic Effects of IFRS

adoption emphasized on the fact that universal financial reportingstandards will increase market liquidity,

decrease transaction costs for investors, lower cost of capital andfacilitate international capital formation and

flows. Chen et al (2010) in their study of financial data of publiclylisted companies in 15 member states of

European Union (EU) before and after the full adoption of IFRS in 2005found that the majority of Accounting

Quality indicators improved after IFRS adoption in the EU. They found thatthere is less of managing earnings

towards a target, a lower magnitude of absolute discretionary accruals andhigher accruals quality. The study Awareness of International FinancialReporting Standards (IFRS) among Post- Graduate Students of

www.iosrjournals.org 18 | Page

also showed that the improved accounting quality is attributable to IFRS,rather than changes in managerial

incentives, institutional features of capital markets and general businessenvironment. Patro and Gupta in their

study found that the adoption of IFRS is a significant event for thebusiness department in management schools

and universities. In order to evaluate the amount and accuracy of studentrespondents’ knowledge and/or

information about IFRS, some keywords/concepts were selected. Respondentswere asked about their

understating of One Accounting World. About 50% of the students gave thecorrect answer as IFRS but 50% are

still unaware of it. Again surprisingly 63%of the respondents are stillunaware that ICAI has decided to adopt

IFRS in India from 2011.

III. Need Of The Study

The introduction of IFRS represents a fundamental change in financialreporting, it said, adding planning

for it, generating the necessary awareness, educating stakeholders andmanaging the required changes will take

considerable management commitment and time to achieve a successfultransition. Due to Globalization Foreign

Capital has crept into the domestic market. The different disclosurerequirements for listing purposes have

hindered the free flow of capital. This has also led to failure incomparison of financial statements of companies

of different countries. In order to have one accounting language manyCountries around the globe have switched

to IFRS and following their track ICAI also decided to implement IFRS inIndia from April 2011. The

requirement is to have an understanding of the new accounting standardswhich are going to be implemented

soon along with the awareness level of the employees and the clients ofvarious companies. The post Graduate

students of Commerce and Management in the near future would be working inthe companies, thus there is a

requirement that these students should be aware of this new concept ofaccounting. This paper tries to assess the

degree of awareness among them and suggest whether there is a requirementof tutorials in this subject to be

given to these students.

IV. Objectives Of The Study

Following are the objectives of this paper:

1. To make a review of the studies conducted on the effects of convergenceof domestic accounting standards

and International Financial Reporting Standards (IFRS).

2. To find out the extent of awareness among the Post Graduate students ofCommerce and Management in

Kashmir about the new concept of International Financial ReportingStandards (IFRS) in the subject of

Accounting and the awareness regarding the process of convergence ofaccounting standards with IFRS in

India.

V. Research Methodology

The type of research is descriptive. Convenience sampling has been adoptedfor the survey. Data has

been collected from the primary source only mainly. To supplement theprimary data, relevant secondary data

has also been used which based on official records, committee reports,journals and books published on the

subject. The survey has been conducted through the Questionnaire method.The questionnaires have been

directly filled by the respondents. Almost all the questions are close-ended. The respondents are the students of

Commerce and management of Department of Business and Financial Studies,University of Kashmir, The

Business School, University of Kashmir, Department of Management Studies,Islamic University of Science and

Technology and the Department of Management Studies, Central University ofKashmir. The sample size

selected was 350 but due to unwillingness and unawareness only 300 studentsresponded to the questionnaire

.The data collected through the questionnaires are presented in thefollowing ways:

Tables

Pie charts

Bar charts

Column Charts

VI. Accounting Standards In India

Accounting standards are rules (framed by an expert committee) in relationto recognition,

measurement and disclosure of financial information in preparation offinancial information. The basic objective

of accounting standard is to standardize the accounting principles and thepolicies with a view to bring a

common approach in preparation of financial statements.

Accounting Standards setting bodies in India- Following are the bodiesresponsible for setting up of

Accounting Standards (AS).

ICAI-: The Institute of Chartered Accountants of India on April 21, 1975established Accounting Standard

Board. The main function assigned to the ASB was to formulate accountingstandards from time to time.

However ICAI with ASB is carrying a good work of formulation and issuanceof accounting standards. The Awareness of International Financial ReportingStandards (IFRS) among Post- Graduate Students of

www.iosrjournals.org 19 | Page

Institute of Chartered Accountants of India (ICAI) is a statutory bodyestablished under the Chartered

Accountants Act, 1949 (Act No. XXXVIII of 1949) for the regulation of theprofession of chartered

accountancy in India

Accounting Standards and SEBI:- Securities and Exchange Board of Indiawas established in 1982 and it

deals with the formulation of laws, by –laws, rules and amendments for thepurpose of giving smooth and

strong support to stock market. SEBI also focuses on protecting theinterest of investors.

Accounting Standards and Income Tax Act 1961-: Section 145 of the incometax Act 1961 deals with

the method of accounting to be adopted for computing the income under thehead of “Profit and gains from

business and Profession. The finance Act 1995 had amended section 145w.e.f. from 1st April 1997.

Accounting standards and company law-:Accounting Standards and Companybill 1997, proposed

prescription of accounting standard by the central government inconsultation with the National Advisory

Committee on Accounting Standards (NACAS) established with sub- clause ofthe clause 415, companies

bill 1997 defines Accounting Standards to mean standards of Accountingrecommended by the Institute of

Chartered Accountants of India constituted under the chartered AccountantsAct 1949 as may be prescribed

by the central government in consultation with NACAS, established undersub-section (1) of the clause

415, companies bill 1997.

VII. Data Analysis And Discussion

With the help of the questionnaire an attempt has been made to find out theextent of awareness

regarding IFRS among Post Graduate Students of Commerce & Management inKashmir:

The respondents in the survey are mostly of the same age group and arepursuing their post-graduation from

different universities in Kashmir Valley. Both male and female studentswere taken as respondents. Table 1

gives the description of the characteristics of the survey participants.

Table 1 : Respondent Characteristics

As per the table, total number of respondents is 300. Majority of therespondents’ i.e 67% (200 out of 300) are

pursuing their courses in University of Kashmir. Out of the totalrespondents questioned 45% (135 out of 300)

are the female students.

Analysis: The table shows that the majority of the respondents i.e., 67%(200 out of 300) are pursuing their

courses in University of Kashmir. Out of the total respondents questioned45% (135 out of 300) are the female

IFRS Taxonomy

Project news22 August 2014 Proposed Interim Release 2 to theIFRS Taxonomy 2014 published for public comment

16 May 2014 IFRS Taxonomy 2014 labels published inArabic

15 May 2014 IFRS Taxonomy 2014 updated for IFRS 14Regulatory Deferral Accounts

29 April 2014 IASB announces membership for the IFRS Taxonomy Consultative Group

7 April 2014 IFRS Taxonomy 2014 Common PracticeProject Call for Participation

3 April 2014 Proposed Interim Release 1 to the IFRSTaxonomy 2014 published for public comment

2 April 2014 IFRS Foundation publishes FormulaLinkbase 2014

5 March 2014 IFRS Foundation publishes the 2014annual version of the IFRS taxonomy

28 February 2014 IFRS Taxonomy 2013 labelspublished in Ukrainian

29 January 2014 The IASB seeks suitable candidatesfor membership and Chair of the IFRS TaxonomyConsultative Group

15 January 2014 Proposed Interim Release Package 2for the IFRS Taxonomy 2013 published for publiccomment

6 January 2014 IFRS Taxonomy 2013 labels publishedin Korean

20 December 2013 IFRS Taxonomy 2013 labelspublished in Japanese

9 September 2013 Proposed Interim Release Packagefor the IFRS Taxonomy 2013 published for publiccomment

18 July 2013 IFRS Taxonomy 2013 labels published inSpanish

11 June 2013 IFRS Taxonomy 2013 labels published inArabic

10 June 2013 XBRL Industry Practice project - callfor participants

22 May 2013 IFRS Foundation publishes FormulaLinkbase 2013

27 March 2013 IFRS Foundation publishes the 2013annual version of the IFRS taxonomy

7 February 2013 Webcast on proposed IFRS Taxonomy2013, recording now available

22 January 2013 IFRS Taxonomy 2012 labels publishedin Hungarian

18 January 2013 Exposure draft of the IFRS Taxonomy2013

4 January 2013 IFRS Taxonomy 2012 labels publishedin Japanese

2 January 2013 IFRS Taxonomy 2012 labels publishedin Korean

28 November 2012 IFRS Taxonomy updated forInvestment Entities

19 October 2012 IFRS Taxonomy 2012 labels publishedin Ukrainian

11 October 2012 IFRS Taxonomy 2012 labels publishedin Arabic

7 August 2012 IFRS Taxonomy 2012 labels publishedin Spanish

6 August 2012 The IFRS Foundation publishes FormulaLinkbase 2012

11 May 2012 The IFRS Taxonomy Annual Convention2012 presentations now available to view

17 April 2012 XBRL Industry Practice Project - Callfor Participants

17 April 2012 XBRL Detailed Tagging Task Force -Call for Participants

3 April 2012 IFRS Taxonomy 2011 labels published inSpanish

29 March 2012 IFRS Foundation publishes the 2012Annual version of the IFRS Taxonomy

7 February 2012 Webcast on proposed IFRS taxonomy2012, recording now available

27 January 2012 IFRS Taxonomy 2011 labels publishedin Japanese

18 January 2012 Exposure draft of the IFRS Taxonomy2012

22 December 2011 IFRS Taxonomy 2011 labelspublished in Korean

9 November2011 IFRS Taxonomy 2011 labels publishedin Italian

27 October 2011 IFRS publish documentation guidancefor the IFRS Taxonomy Formula Linkbase

16 September 2011 IFRS Taxonomy 2011 labels re-published in Arabic

1 September 2011 IFRS Taxonomy updated for CommonPractice Concepts

19 August 2011 IFRS Taxonomy updated for financialstatement presentation and employee benefits

15 August 2011 IFRS Taxonomy 2010 labels publishedin Traditional Chinese.

27 July 2011 IFRS Taxonomy updated for fair valuemeasurement and disclosure of interests in otherentities

24 June 2011 IFRS Taxonomy 2011 labels published inArabic

2 June 2011 IFRS Foundation publishes proposed IFRSTaxonomy enhancements for reporting common-practice

19 April 2011 Interoperable Taxonomy ArchitectureProject publishes updated Global Filing Manual forXBRL

12 April 2011 IFRS Foundation publishesillustrative examples in XBRL for the IFRS Taxonomy2011

Click here to see all previous news.

Click here to receive IASB XBRL email alerts(requires e IFRS registration ).

Click here to read the latest XBRL Update newsletter.

 How we develop IFRSs

International Financial Reporting Standards (IFRS) are developed through an international consultationprocess, the "due process", which involves interested individuals and organisations from around the world.

The due process comprises six stages, with the Trustees of the IFRS Foundation having the opportunity to ensure compliance at various points throughout:

Setting the agenda

Planning the project

Developing and publishing the Discussion Paper, including public consultation

Developing and publishing the Exposure Draft, including public consultation

Developing and publishing the Standard

Procedures after an IFRS is issued

IFRSs and XBRLBoth IFRSs and XBRL are intended to standardisefinancial reporting in order to promotetransparency and to improve the quality andcomparability of business information, thereforethe two form a perfect partnership.

The IASB XBRL Team is responsible for developingand maintaining the XBRL representation of theIFRSs, known as the IFRS Taxonomy. The IFRSTaxonomy is used around the world to facilitate theelectronic use and exchange of financial dataprepared in accordance with IFRSs.

The IASB's XBRL activities include:

Taxonomy development - for companies reporting inIFRS, the Foundation publishes tags for each IFRSdisclosure. These tags are organised and containedwithin the IFRS Taxonomy.

Support materials - the Foundation produces supportmaterials to facilitate use and understanding ofthe IFRS Taxonomy.

Translations - translations of the IFRS Taxonomyinto key languages are provided to support users ofIFRSs and the IFRS Taxonomy whose primary languageis not English.

Global outreach - the Foundation makes a concertedeffort to promote the use of XBRL in conjunctionwith IFRSs around the world. The Foundation alsoencourages co-operation and communication withusers of the IFRS Taxonomy.

About XBRLXBRL (eXtensible Business Reporting Language) is adigital 'language' that was developed to provide acommon, electronic format for business andfinancial reporting. In XBRL, mark-up tags are usedto make business information computer-readable andconsumable.

Read more

IFRS Foundation launches eIFRSProfessional 15 October 2014

The IFRS Foundation today completed a major programme of reforms to itssuite of online IFRS resources with the launch of a new flagship product,known as eIFRS Professional.

eIFRS Professional has been developed from the ground up to provide IFRSprofessionals with immediate online access to authoritative, annotatedversions of IFRS and supporting materials.  Subscribers to the eIFRSProfessional service benefit from:

A new and unique Standards Comparison tool that allows users to viewchanges to a Standard between current, prior and subsequent years.

An entirely new user interface, with access to all IFRS content in lessthan three clicks.

A powerful new search facility with sophisticated filtering options.

Access to the IFRS Foundation’s Education resources, including annotatednotes to the Standards, executive briefing materials and the IFRS Pocket Guide.

Full access to the IFRS Foundation’s vast archive of IFRS content,available in multiple languages and spanning nearly four decades.

To find out more about eIFRS, or to watch a video walkthrough of the new functionality of eIFRS Professional, please visit the eIFRS homepage.

In addition to the launch of eIFRS Professional, the IFRS Foundation isalso making available new versions of the other components of its eIFRSsuite of online resources. eIFRS Basic provides users with limited accessto the basic IFRS Standards, while eIFRS Comprehensive includes asubscription to eIFRS Professional as well as offline, print editions ofthe Standards and other materials. Existing subscribers to eIFRS willautomatically be upgraded to eIFRS Professional.

Commenting on the launch, Yael Almog, Executive Director of the IFRSFoundation said:

eIFRS Professional represents a step change in the online resources available to accountingprofessionals, whether they are preparers, auditors, academics, students or others. eIFRS is today theauthoritative IFRS online product on the market with unique features, raising the bar for ease of usewhen accessing online IFRS content. We are proud and happy to introduce a product which wedeveloped after extensive customer feedback.

 

Source: www.ifrs.org /alerts/publication/page/IFRS Foundation –launches –eIFRS –professional-oct .2014 aspx. Retrived on 15-10-2014.

Educational quiz launched as resourcefor educators and students 30 September 2014

The IFRS Foundation has today launched an online educational quiz as afree-of-charge resource for students, educators and other interestedparties to assess their knowledge of the use of IFRS, the IASB as well asthe Standards themselves. The online quiz has been developed by former IASBMember Paul Pacter and draws upon information available from the recentlypublished I FRS as global standards: a pocket guide.

Quiz participants will be presented with 10 true or false statements drawnrandomly from 220 possible questions.  The quiz is instantly graded withanswers and explanations provided for the answers shown. The IFRSFoundation will also make the entire set of 220 Q&As available toaccounting educators and trainers who are using IFRS as global standards: a pocketguide as a textbook. The quiz is provided as a convenience for interestedparties. Completion of the quiz should not be considered as any form ofcertification of participants by the IFRS Foundation. For furtherinformation please email ppacter@ifrs.org.

Access the IFRS Quiz.

 IFRS Quiz

Based on IFRS as global standards: a pocket guide

The IFRS Foundation has developed an online quiz based on the content ofIFRS as global standards: a pocket guide. The Quiz contains 220 true-falsequestions. When you take the quiz you will be given 10 randomly selectedquestions. When you finish the 10 questions, the quiz is instantly gradedwith correct answers and explanations for the answers shown. You may repeatthe quiz as many times as you like, with a new selection of 10 questionseach time.

Access the IFRS Quiz.

 

The IFRS Foundation will also make the entire set of 220 Q&As available toaccounting educators and trainers who are using IFRS as global standards: a pocketguide as a textbook. For further information, please email ppacter@ifrs .org .

Roadmap outlines a phase approach to IFRS adoptionBased on roadmap issued by MCA till date, IFRS may become mandatory in

India.

Summary: The Ministry of Corporate Affairs (MCA) laid out a roadmap for IFRS convergence, to be conducted in phases, for first-time adoption in India.

IFRS conversion is more than an accounting change

Many areas of a company outside of the finance function may be impacted, including:

Information technology Group structures Direct and indirect taxes Strategic plans (IPOs, investor relations, executive compensation)

Roadmap for IFRS conversion

The roadmap requires a phased approach for IFRS adoption. The three phases are outlined as follows:

Phase Date CoveragePhase 1

Opening balance sheet as of 1 April 2011*

1.Companies that are part ofNSE 50 (Nifty 50)

2.Companies that are part ofBSE Sensex (BSE 50)

3.Companies whose shares or other securities are listed on a stock exchangeoutside India

4.Companies, listed or not, having net worth exceedingINR1,000 crore

Phase 2

Opening balance sheet as of 1 April 2013*

Companies not listed in phase 1 and having net worth exceeding INR500 crore

Phase 3

Opening balance sheet as of 1 April 2014*

Listed companies not covered in the earlier phases

*If the financial year of a company commences at a date other than 1 April, then it shall prepare its opening balance sheet at the commencement of the immediately following fiscal year.

IFRS roadmap overview

The MCA roadmap has provided specific dates for adoption of IFRS in India on the basis of a company’s net worth as indicated by the exchange on which

they are traded. The IFRS conversion roadmap for Banks and Insurance companies will follow separately.

Phase 1 companies are required to start reporting IFRS results from the first quarter of year beginning 1 April, 2011. Also, depending on how a company elects to present comparative information in the first year, the actual date of transition could be as early as 1 April 2010.

The core group and its sub-group 1, constituted by the MCA for IFRS convergence, shall determine IFRS conversion roadmap for banking and insurance companies separately by 28 February 2010.

Non-listed companies with net worth of less than INR 500 crore and other small and medium-sized companies (SMCs) have been given an option to continue to either follow non converged standards (hereinafter referred to as “Indian GAAP”) or to adopt IFRS.

The draft of the Companies (Amendments) Bill, proposing for changes tothe Companies Act, 1956, will be prepared by February, 2010.

The Institute of Chartered Accountants of India (ICAI) has submitted to the MCA revised Schedule VI to the Companies Act, 1956. The NACAS shall review the draft and submit a revised Schedule VI to the MCA by 31 January 2010. Amendments to Schedule XIV will also be carried out in a time bound manner.

Convergence of all the accounting standards with IFRS will be completed by the ICAI by 31 March 2010 and the NACAS will submit its final recommendations to MCA by 30 April 2010.

Questions, perspectives and points of view on adoption of IFRS

Summary: Transition to IFRS, via the roadmap, will require interpretation and company guidance.

Determining applicability and transition dates   Calculating net worth   Discontinuing use of IFRS   Subsidiaries, joint ventures or associates of covered under the

conversion roadmap   First-time adoption   Removal of options  

Inside

o Phase approach o Determine applicability, transition dates o Calculate net worth o Discontinuing use of IFRS o First-time adoption o Removal of options o Other scenarios

o Return to Indian IFRS   overview

Download

MCA issues roadmap for IFRS conversion in India   as a printable PDF (149 KB).

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IFRS Taxonomy 2014 Updated for IFRS 15 Revenue from Contracts with Customers and Common Practice (transport and pharmaceuticals) 12 November 2014

The IFRS Foundation today published Interim Release 2 to the IFRS Taxonomy 2014. This release updates the IFRS Taxonomy for IFRS 15 Revenue from Contractswith Customers, which was published by the IASB on 28 May 2014, and Common Practice (transport and pharmaceuticals).

The  IFRS Taxonomy is the XBRL representation of the IFRSs, including

International Accounting Standards (IASs), Interpretations, and the IFRS for SMEs, as issued by the IASB.

XBRL taxonomies are available for most of the major national financial reporting standards around the world, and the IFRS Taxonomy is intended foruse by entities reporting in IFRS. By providing the IFRS Taxonomy, the IFRSFoundation seeks to address the demand for an electronic standard to transmit IFRS financial information.

IFRS Taxonomy Interim Releases support consistent adoption and implementation of IFRS, by providing taxonomy items for electronic reporting using the latest Standards published by the IASB.

Accompanying this release is the IFRS Taxonomy Guide: Guide to Understanding the IFRS Taxonomy Update. This guide provides an overview of the content of the IFRS Taxonomy and explains the related terminology used. A summary reference sheet of the terms described within this guide is also available.

IFRS 10 – Control of a structured entity by an operating lease( sourcewww.iasplus.com/en/meeting-notes/ifrs-ic/2014/November/ifrs-10 retrieved on November 22)Share on email Share on facebook Share on twitter Share on linkedin More Sharing Services Date recorded: 11 Nov 2014

The Senior Technical Manager introduced the agenda paper concerning a structured entity that was created to lease a single asset to a single lessee. The structured entity was the lessor in an operating lease. The submitter had asked whether the lessee’s right of use of the asset and its

right to exercise a purchase option gave the lessee power over the struc-tured entity’s relevant activities. The submitter put forward two views:

Under View A, the lessee’s right to use the leased asset affected the residual value of the leased asset and thus the returns of the structured entity. Hence, under View A, the operating lessee directed the relevant activities of the structured entity.

Under View B, the right of use of the leased asset did not give the lessee power over the structured entity. The submitter noted that the lease would contain covenants to ensure that the lessee did not damage the leased asset. The relevant activities were therefore monitoring the default of thereceivable and the use of the asset and managing the sale or re-lease of the asset if the purchase option was not exercised by the lessee.

An outreach had resulted that there was no diversity in practice. View A had had little or no support amongst the constituents consulted.

In addition to the questions submitted, the staff analysis considered the effect on the relevant activities of the structured entity of the lease being an operating lease. The analysis also examined whether other require-ments of control were met and what the intention of IFRS 10 and IAS 17 was.

As a result of the analysis, the staff concluded that they were in View B. The returns of the structured entity would arise from the residual value ofthe asset, the credit risk on lease receivables and the financing risks on its interest outflows. In the staff’s view, the lessee did not have power over those relevant activities.

The staff recommended that the Committee should not take the issue onto itsagenda as there was no significant diversity in practice and the standard gave sufficient guidance to make the consolidation assessment.

One Committee member agreed with the staff recommendation. He said that there was not enough information in the fact pattern but he tended to thinkthat IFRS 10 would provide the solution if all information was available. He suggested to add the purchase option to the tentative agenda decision asotherwise it would be a very trivial case. He was concerned about the reference in the draft tentative agenda decision that the lessee did not control because the transaction was an operating lease. He said that there could be operating leases that led to control. Another Committee member agreed and suggested to delete the sentence where it was suggested that theclassification of the lease influenced the control assessment. An observingBoard member agreed as well and said that a lease would not influence the control assessment as it was a right to use a particular asset.  Another Board member replied that a lessee could nonetheless control an entity.

 Exposure Draft and Comment letters

The International Accounting Standards Board (IASB) today published an Exposure Draft detailing proposed amendments to IFRS 2 Share-based Payment.

The Exposure Draft Classification and Measurement of Share-based Payment Transactions brings together a collection of three proposed amendments to IFRS 2. These proposed amendments were initially discussed by the IFRS Interpretations Committee. The proposals provide guidance on:

1. the accounting for the effects of vesting conditions on the measurement of a cash-settled share-based payment; 

2. the classification of share-based payment transactions with net settlement features; and

3. the accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transactionfrom cash-settled to equity-settled.

Comment letter deadline

The Exposure Draft is open for comments until 25 March 2015.

All comment letters should be submitted via the online upload page below. Please refrain from sending comment letters to IASB or IFRS Foundation individuals as this risks duplication and may cause delays in the posting of letters onto the ifrs.org website. Board and staff members have access to all comment letters submitted via the online upload page. You must be aneIFRS Basic user to submit a comment letter. Registration is free, and you can register here (registration is free).

Submit a Comment letter.

Please note: when submitting a comment letter or when communicating with the IFRS Foundation, the IASB or any of its constituent bodies, you acknowledge and accept the IFRS Foundation Written Communication policy which details how we use and process your data.

View the Comment letters.