IFRS

INTERNATIONAL FINANCIAL REPORTING

STANDARDS
INTRODUCTION
WHAT IS IFRS

A set of international accounting standards stating how particular types of

transactions and other events should be reported in financial statements .

INVESTOPEDIA EXPLAINS

“Goal of IFRS is to make international comparisons as easy as possible.”

WIKIPEDIA EXPLAINS

IFRS are standards , interpretations and the framework adopted by international

accounting standards.
THE REGULATORY BODY
The regulatory body which has come out with these standards is INTERNATIONAL ACCOUNTING
STANDARDS BOARD(IASB).

It was first known as International accounting standards committee (IASC) which was introduced in 1973.

The IASC was converted into IASB in the year 2001.

Headquarters is at London

The IASB had 14 committee members .

In 2001 the IASB adopted all the 41 standards issued by IASC.

Many of the standards forming part of IFRS were known by old name IAS
GOAL OF IASB
to adopt common accounting language called as
IFRS.
to create global standards that are transparent and
of high quality
PRINCIPLES OF IFRS

Fair presentation and compliance with IFRSs

Going Concern
Accrual basis of accounting
Materiality and aggregation
Consistency of presentation
 ifrs
global development
•Approximately 113 countries
•Includes the European union that comprises of 27
member states
•India along with China, Canada, Brazil, Korea, Japan,
Russia will accept it by the end of 2011

•It is estimated that the number of countries that will be

switching over to IFRS by the end of 2011 will be 150.

•More than 12,000 companies have adopted IFRS all

around the world.
•The European Union made is mandatory for
companies registered in its member states and whose
shares are listed in the European Union regulated market,
to compulsorily submit their financial statements under
IFRS norms.

•Australia and New Zealand are also compelling

their public companies to adopt the IFRS norms.

•Even the U.S securities exchange commission (SEC) has

allowed foreign private issues to use IFRS without
reconciliation to U.S GAAP.

•U.S may converge to IFRS starting by 2014.

Benefits of adopting IFRS
Transparency and comparability
Low cost of capital
Eliminates need for multiple reporting
True value of acquisition
Cross border transaction
Sets a benchmark
Improvement in planning and forecasting
Challenges

A Hard Rock To Drill

The problems faced by ifrs?

 Time Constraint
 Rigid Training is Required
 Re structuring and New Software
Implementation is required
 Cost constraint
 Conceptual Difference
Convergence of IFRS in India
• Legal and/ or regulatory framework
•To reduce or eliminate the alternatives so as
to ensure comparability.
•To reduce or eliminate the alternatives so as
to ensure comparability.