What do you want to know on IFRS The essentials
When it comes to financial reporting, it makes sense to use a standard process and way of representing it. This is why IFRS is an important concept making the accounts of any organisation understandable across international boundaries. If you want to know more about IFRS and the advantages of getting a certification in IFRS, read on. But do not underestimate the effort, local habits in financial reporting take a longer time to align to International Financial Reporting Standards
What is IFRS?
IFRS (International Financial Reporting Standards) is a code/mutual understanding of international accounting standards which has been established by the IFRS Foundation and International Accounting Standards Board (IASB). The goal is to provide a mutual world-wide dictionary for the companies to prepare and publish financial reports so that it is acceptable and recognisable across the world. What do you want to know on IFRS The essentials
International financial reporting standards facilitate comparison of financial accounts of organisations from different countries from different parts of the world. Otherwise, an interested person (or financial analyst) has to find out the accounting principles followed in those countries, then find out the differences in the accounting standards. This leads to a tedious task of comparing and adjusting. What do you want to know on IFRS The essentials
IFRS has made it easier to compare organisations from different parts of the world who follow the common accounting standards.
What are the advantages of adopting IFRS? What do you want to know on IFRS The essentials
Apart from providing a common understanding or standard of reporting, there are several advantages of adopting IFRS. The most prominent ones are mentioned here:
Increased comparability – When businesses are using a similar financial reporting standard, it makes easier for investors to compare the financial statements more accurately. It is highly helpful for investors to understand where to invest when they have a clear picture of the financial comparisons of the organisations.
Benefits new and small investors – As the financial standards are standardised, the reporting standards are made simple and have better quality. This puts the new and small investors at par with professional investors and as the financial standards are more and more aligned to investment and shareholders’ analysis as to be read by all, they do not face the risk of professionals taking advantage. What do you want to know on IFRS The essentials
Cost savings – As the accounting standards are streamlined through IFRS, companies can manage their resources better. It can also lower the cost of auditing and statutory reporting.
Lowers cost constraints – As the financial reports are standardised through IFRS, businesses can raise more capital from foreign markets at a lower rate as it creates a sense of confidence among the investors. It is easy for investors to understand the financial reporting when it complies with the international standards. What do you want to know on IFRS The essentials
What is this all about!!! What do you want to know on IFRS The essentials
A website as an more easily accessible guide to IFRS. Hyperlinks improve going to a subsection or obtain a quick detail or background without getting lost or distracted from the core of the IFRS problem you are trying to solve or are trying to understand for your next examination.
The IFRS – IAS – IFRIC – SIC Tab provides access to all IFRS standards, IFRSs and IFRICs on left side and IASs and SICs on the rights side. With IFRSs for SMEs killing it at the end.
The Tab Conceptual framework provides access to the (off course) the Conceptual framework. What do you want to know on IFRS The essentials
The Tab All IFRS Topics A – Z provides access to an alphabetic list with all blog titles. What do you want to know on IFRS The essentials
The right sidebar starts with thew Summary topics main IFRS that provides the IFRS Topics in more or less following the content dictionary of each standard, each important blog in its context so to say. Pick a Topic by IFRS is a list of categories through the IFRS standards with some subdivisions to the IFRS Blogs.
Newest topics is what you think it is. Still haven’t found what you’re looking for…. sounds like a certain Irish band, but it is the tag cloud of the most used IFRS keywords. And then the IFRS Standards, again all IFRS standards, IFRSs, IASs, IFRICs and SICs, sometime this list is faster than the page button above. What do you want to know on IFRS The essentials
The one thing we know, using IFRS – IAS – IFRIC – SIC, Conceptual framework, All IFRS Topics A – Z, etcetera together with our fully indexed search engine should enable an average IFRS student easy access to a lot, really a lot of IFRS documentation, from journal entry to all the industry specific IFRS knowledge and explanations there are.
But there is room for improvement, the internal linking to IFRS data is on the way but it will take some time to make it complete. On the other hand I do not want a pop-up on almost every IFRS term on your screen when hovering the text. What do you want to know on IFRS The essentials
INFORMATION ABOUT THE LATEST DEVELOPMENTS What do you want to know on IFRS The essentials
This site is directly involved in further developing the IFRS standards: to this end they are seconded to the IASB (International Accounting Standards Board). This site therefore always incorporates information about the latest developments in these activities. What do you want to know on IFRS The essentials
Business impact What do you want to know on IFRS The essentials
Many countries already require or permit IFRS for financial reporting purposes and many more are in the process of converging. As a result, many US multinational companies are already dealing with IFRS in their foreign subsidiaries. Therefore, where IFRS is being adopted by US foreign subsidiaries, the parent companies in the US need to ensure they have input into the accounting policy elections under IFRS (upon adoption).
Selection decisions usually cannot be undone for reporting purposes unless the change results in more relevant and reliable information and simplifies group reporting where there is consistency in policy throughout the group.
If IFRS is incorporated into the US accounting framework, taking a centralized approach to IFRS reporting can potentially create significant cost savings for companies with many subsidiaries. For example, companies may want to think about shared service centres to consolidate back office functions such as financial reporting. It is also an ideal opportunity to streamline and enhance business processes, simplify policies and take advantage of changes in the IT environment.
As companies look to upgrade their systems infrastructure, they should carefully consider whether the new systems infrastructure can comply with measurement and disclosure requirements under the proposed convergence standards or under IFRS. Depending on the final method or process selected to incorporate IFRS into the US accounting framework, companies may need the ability for their systems to handle dual reporting requirements during a transition period.
Tax considerations may also require dual reporting. Identifying potential gaps in data will allow companies to design systems that deliver the necessary information in an efficient and timely manner. In addition internal control (especially resulting from SoX requirements for public companies) is important. Companies need to ensure that appropriate internal controls over financial reporting are in place -“spreadsheet conversions” are not likely to comply.
Converging to or adopting IFRS will have an impact on long term contracts and financial agreements. For example, a company’s debt covenants might specify a certain debt-equity ratio, which may change once the company applies new US standards or adopts IFRS, therefore making it necessary for the company to renegotiate or seek modifications to its debt agreements.
See also: The IFRS Foundation
What do you want to know on IFRS The essentials
What do you want to know on IFRS The essentials What do you want to know on IFRS The essentials What do you want to know on IFRS The essentials