+7(499)-938-42-58 Москва
+7(800)-333-37-98 Горячая линия

International financial reporting standards (IFRS)

International Financial Reporting Standards (IFRS Standards)

International financial reporting standards (IFRS)
1 October 2002

The International Accounting Standards Board (the Board) was established in 2001 and is the independent standard-setting body of the IFRS Foundation, an independent, private sector, not-for-profit organisation working in the public interest. Its principal objectives are:

  • to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards (IFRS Standards) based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world's capital markets and other users of financial information make economic decisions;
  • to promote the use and rigorous application of those standards;
  • in fulfilling the objectives associated with (1) and (2), to take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings; and
  • to promote and facilitate adoption of IFRS Standards, being the standards and interpretations issued by the Board, through the convergence of national accounting standards and IFRS Standards.

The governance and oversight of the activities undertaken by the IFRS Foundation and its standard-setting body rests with a geographically and professionally diverse body of Trustees, who are also responsible for safeguarding the independence of the Board and ensuring the financing of the organisation. The Trustees are publicly accountable to a Monitoring Board of public authorities.

The Board is an independent group of experts with an appropriate mix of recent practical experience in setting accounting standards; in preparing, auditing, or using financial reports; and in accounting education. Broad geographical diversity is also required.

Members are appointed by the Trustees through an open and rigorous process that includes advertising vacancies and consulting relevant organisations. The IASB has 14 full-time members. The Board develops and maintains a set of accounting requirements collectively referred to as International Financial Reporting Standards (IFRS Standards).

IFRS Standards are a set of high quality, understandable, enforceable and globally accepted Standards based up on clearly articulated accounting principles. The Board has no authority to impose those Standards.

However, entities that wish, or are required by a particular jurisdiction, to assert compliance with IFRS Standards must comply with all of the individual IFRSs Standards and IFRS Interpretations (Interpretations) issued by the Board. IFRS Standards generally contain principles and accompanying application guidance, both of which are mandatory and carry equal weight.

Some Standards also include illustrative examples or implementation guidance, neither of which is part of IFRS Standards. They are therefore not mandatory. Each Standard and Interpretation has a basis for conclusions that explains the Board's reasons for developing the particular requirements. The basis for conclusions is not part of IFRS Standards and is therefore also not mandatory.

Additionally, the Board has a Conceptual Framework for Financial Reporting (the Framework). This Framework is designed to help the Board develop IFRS Standards. The Framework is also designed to help those applying IFRS Standards address matters not covered by IFRS Standards.

However, the Framework is not a Standard and the accounting requirements in an IFRS Standards take precedence over the Framework. The Board develops IFRS Standards in the public interest.

Through the Board's due process, it consults and engages with investors, regulators, business leaders and the global accountancy profession at every stage of the process, whilst maintaining collaborative efforts with the worldwide standard-setting community.

In developing IFRS Standards and Interpretations the Board publishes and seeks public comment on Discussion Papers and Exposure Drafts. Those documents are not part of IFRS Standards. The IFRS Interpretations Committee is the interpretative body of the Board.

The Interpretations Committee has 14 voting members appointed by the Trustees, and its members are drawn from a variety of countries and professional backgrounds.

The Interpretations Committee's mandate is to review on a timely basis widespread accounting issues that have arisen within the context of current IFRS Standards and to provide authoritative guidance (IFRIC Interpretations) on those issues. The Interpretations Committee also develops proposals for narrow scope amendments to IFRS Standards on behalf of the Board. In developing Interpretations and narrow scope amendments, the Interpretations Committee follows a transparent, thorough and open due process. However, it is the Board that issues Interpretations and narrow scope amendments and the Board that considers and votes on each Interpretation and narrow scope amendment before it is issued. As well as IFRS Standards, the Board has issued an IFRS Standard for SMEs, to meet the needs and capabilities of small and medium-sized entities (SMEs) and users of their financial statements. Any company of any size is eligible to use the IFRS Standard for SMEs, provided it does not have public accountability. An entity has public accountability if it is publicly traded, or if it is a financial institution or similar entity. The IFRS Standard for SMEs is IFRS Standards but is much less complex.

View the Assessment Methodology

As part of the Reports on the Observance of Standards and Codes (ROSC) initiative, the World Bank has established a program to assist its member countries in implementing international accounting and auditing standards for strengthening the financial reporting regime. The objectives of this program are two-fold:

  • Analyze comparability of national accounting and auditing standards with international standards, determine the degree with which applicable accounting and auditing standards are complied, and assess strengths and weaknesses of the institutional framework in supporting high-quality financial reporting.
  • Assist the country in developing and implementing a country action plan for improving institutional capacity with a view to strengthening the country's corporate financial reporting regime.

Content Type(s): Compendium Source(s): IASB Policy Area(s): Institutional and Market Infrastructure Topic(s): Accounting and Auditing, Transparency and Disclosure

Источник: https://www.fsb.org/?p=2622

What is IFRS – International Financial Reporting Standards in Accounting

International financial reporting standards (IFRS)

Businesses are operating all over the world. Certain organizations have worldwide existence. If we take an example of Infosys, which is an Indian IT company, works all over the world.

The accounting information of one particular company in so many countries will be as per that country’s law and reporting standards. Therefore there will be confusion in considering the accounting information.

In order to avoid this confusion, International Accounting Standards Board (IASB) has created one unique accounting language which is called as International Financial Reporting Standards most commonly known as IFRS.

Who designed IFRS?

International Accounting Standards Board (IASB), is the standard-setting body of the IFRS. It was founded on 1st April 2001 and it was the successor to the International Accounting Standards Committee.

Why International Financial Reporting Standards?

  • Indian companies are listed on other stock exchanges and they have to again re-form their accounting information with GAAP requirement of those companies.
  • Also, foreign companies which have subsidiaries in India also have to reform their financial statements as per the reporting standards of India. Foreign Direct Investment (FDI), Financial Institutional Investors (FII’s) are also more comfortable with a uniform way of reporting information.
  • IFRS are globally accepted, therefore there is no confusion while dealing with financials of the company.
  • These standards and principles are comparatively simple.
  • Anybody from anywhere can do judgment of the business on the basis of IFRS reporting standards.
  • Also, the International Financial Reporting Standards is a way to minimize costs.

Adoption of IFRS

Many countries in the world the European Union, Hong Kong, Australia, are using IFRS. As per August 2008 data, more than 113 countries around the world require or permit IFRS reporting and other 85 require IFRS reporting.

Difference between Indian GAAP and IFRS

Indian accounting standards are not flexibleIFRS are flexible in nature
Extraordinary items are reported separatelyNo provision for reporting extraordinary items
No standard for the first-time adoptionIt sets the standards for the first-time adoption
As per companies act, business is required to report the following financial statements, Balance Sheet Profit and Loss AccountNotes to accountsIAS-1 require a business to report financials following financial statements-
The minimum rate of depreciation to be applied by the company is defined by the Companies Act.IAS-16 Property Plant and Equipment allows management to charge depreciation
The Schedule VI to the Companies Act, 1956 specifies Indian Rupees as the reporting currency.Required to use the functional currency. However, entities may use different currencies.

Advantages of using IFRS

  • Due to the implementation of International Financial Reporting Standards, companies would be better understood in global markets.
  • Companies will be able to tap global capital markets and may reduce their cost of capital.
  • At the international level, benchmarking would be easy.
  • Because of universal global accounting language, internal communications would be easy and improved.

To whom IFRS is applicable?

Public entities or the business’s which include companies which are listed on stock exchanges, part of public interest or public sector, such companies should implement International Financial Reporting Standards.

Generally, these entities include:

  • Listed companies
  • Banks
  • Mutual Funds
  • Insurance companies
  • Financial Institutions
  • Subsidiaries or Holding companies of the same.
  • As of now, IFRS is not applicable to Small Medium Enterprises (SME’s).

Challenges in IFRS

  • Implementation of International Financial Reporting Standards involves recruitment of experienced person and training of fresher’s in the IFRS domain.
  • Availability and consistency of data can be another issue.
  • Managing and handling system capacities
  • Management of volatility of results
  • Impact on other parallel systems and changes of the same systems.
  • A very important obstacle is the amount of cost and time involved in this entire process.

Requirements of IFRS

The IFRS requirements include:

  • Company’s financial statement position
  • Statement of Comprehensive Income separate statements comprising an Income Statement and separately a Statement of Comprehensive Income, which reconciles Profit or Loss on the Income statement to total comprehensive income
  • Statement of Changes in Equity (SOCE)
  • Cash Flow Statement or Statement of Cash Flows
  • Notes, including a summary of the significant accounting policies

Indian IFRS Scenario

Though The Institute Chartered Accountants of India (ICAI) has announced that IFRS will be mandatory in India for financial statements on or after April 1st, 2012, this plan is failed. The roadmap was given but still, Indian companies are following old Indian GAAP. There is no specific date given for the adoption of IFRS now.

Key players regarding the development and adoption of IFRS

Securities and Exchange Commission is responsible for the supervision and regulation of the securities industry. The Financial Accounting Standards Board (FASB) is a body which establishes and interprets U.S. GAAP. IASB works with the FASB on the convergence of U.S. GAAP and IFRS.

How IFRS differs in key issues from US GAAP?

• In inventory valuation techniques IFRS does not permit Last In, First Out (LIFO).

• International Financial Reporting Standards uses a single-step method for impairment write-downs rather than the two-step method used in U.S. GAAP, making write-downs more ly.

• International Financial Reporting Standards does not permit debt for which a covenant violation has occurred to be classified as non-current unless a lender waiver is obtained before the balance sheet date.

Cost of converting to IFRS

The costs are dependent on the size and nature of the business. However basic costs include staff training, IT support, implementation of International Financial Reporting Standards.

Opportunity cost also has a role to play here.

As of November 2008, the Securities and Exchange Commission estimated that the largest companies which adopt IFRS early experience around $32 million per company in additional costs.

Источник: https://www.educba.com/what-is-ifrs/

IFRS ( International Financial Reporting Standards ) – Meaning & Standards

International financial reporting standards (IFRS)

The field of financial reporting in India has seen major changes in the last 5 years. As the trade increasingly moves beyond the national boundaries, the compliance and reporting requirements move too. Presenting the financial statements of an entity in accordance with the reporting requirements of every country it has a presence in, is becoming increasingly difficult.

    In this article we will deal with the following:

The International Financial Reporting Standards (IFRS) are accounting standards that are issued by the International Accounting Standards Board (IASB) with the objective of providing a common accounting language to increase transparency in the presentation of financial information.

What is IASB?

The International Accounting Standards Board (IASB), is an independent body formed in 2001 with the sole responsibility of establishing the International Financial Reporting Standards (IFRS).

It succeeded the International Accounting Standards Committee (IASC), which was earlier given the responsibility of establishing the international accounting standards. IASB is based in London.

It has also provided the ‘Conceptual Framework for Financial Reporting’ issued in September 2010 which provides a conceptual understanding and the basis of the accounting practices under IFRS.

Components of Financial Statements under IFRS

A complete set of financial statements prepared in compliance with the IFRS would ideally comprise of the following:

  • A statement of financial position as at the end of the period – more commonly known to us as the ‘Balance sheet’.
  • A statement of profit and loss for the year and the statement of other comprehensive income – Other comprehensive income would include those items of income/expense that are not recognized in the profit and loss account to comply with the other relevant standards.

Both these statements may either be combined or shown separately.

  • A statement of changes in equity – This would include a reconciliation between amounts shown at the beginning and the end of the year.
  • A statement of cash flows for the period
  • Notes to the financial statements – including a summary of significant accounting policies followed and other explanatory information

The financial statements would sometimes also include a statement of the financial position of an earlier period in the following scenarios:

  • When an entity applies an accounting policy retrospectively;
  • When an entity retrospectively restated an item in its financial statements; or
  • When an entity reclassifies an item in its financial statements.

List of International Financial Reporting Standards (IFRS)

As already discussed, the Standards issued by the IASB are called IFRS. The predecessor body, IASC, had however already issued certain International Standards which are called International Accounting Standards (IAS). These IAS were issued by the IASC between 1973 and 2001. Both IAS and the IFRS continue to be in force. The standards are listed below:

Standard No.Standard Title
IFRS 1First-time Adoption of International Financial Reporting Standards
IFRS 2Share-based Payment
IFRS 3Business Combinations
IFRS 4Insurance Contracts
IFRS 5Non-current Assets Held for Sale and Discontinue Operations
IFRS 6Exploration and Evaluation of Mineral Resources
IFRS 7Financial Instruments: Disclosures
IFRS 8Operating Segments
IFRS 9Financial Instruments
IFRS 10Consolidated Financial Statements
IFRS 11Joint Arrangements
IFRS 12Disclosure of Interests in Other Entities
IFRS 13Fair Value Measurement
IFRS 14Regulatory Deferral Accounts
IFRS 15Revenue from Contracts with Customers
IFRS 16Leases
IFRS 17Insurance Contracts
IAS 1Presentation of Financial Statements
IAS 2Inventories
IAS 7Statement of Cash Flows
IAS 8Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10Events after the Reporting Period
IAS 11Construction Contracts
IAS 12Income Taxes
IAS 16Property, Plant, and Equipment
IAS 17Leases
IAS 18Revenue
IAS 19Employee Benefits
IAS 20Accounting for Government Grants and Disclosure of Government Assistance
IAS 21The Effects of Changes in Foreign Exchange Rates
IAS 23Borrowing Costs
IAS 24Related Party Disclosures
IAS 26Accounting and Reporting by Retirement Benefit Plans
IAS 27Separate Financial Statements
IAS 28Investments in Associates and Joint Ventures
IAS 29Financial Reporting in Hyperinflationary Economies
IAS 32Financial Instruments: Presentation
IAS 33Earnings per Share
IAS 34Interim Financial Reporting
IAS 36Impairment of Assets
IAS 37Provisions, Contingent Liabilities, and Contingent Assets
IAS 38Intangible Assets
IAS 39Financial Instruments: Recognition and Measurement
IAS 40Investment Property
IAS 41Agriculture

Источник: https://cleartax.in/s/ifrs

Нет комментариев

    Добавить комментарий

    Ваш e-mail не будет опубликован. Все поля обязательны для заполнения.