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Due to the globalization process, organizations have become truly global in nature with their presence in different countries of the world. However, due to different accounting standards prevailing in each country, international organizations have to report their financial performance according to different standards. This, therefore, created the issue of uniformity of the accounting reporting and disclosure requirements. The rapid internationalization of the business activities necessitated the creation of a uniform set of accounting standards to improve the disclosure requirements. It is critical to note that not all countries have adopted the IFRS and the overall process is still considered as challenging for most of the countries. One of the most notable omissions is US which has not yet adapted the standards for different reasons. This literature review will discuss the issues and concerns which are preventing US from adapting the IFRS. International Financial Reporting Standards It is argued that financial accounting standards are necessary because they allow investors and other stakeholders to have access to the information which is consistent as well as understandable. Following a uniform set of accounting standards is considered as important from the view point of consistency (Cangemi, 2008). Globalization should be considered as one of the beginning points towards the development of IFRS. It was the increase in the overall complexity of businesses at the international level that has resulted in the development of IFRS at the global level. The process of globalization is considered so strong that it requires revamping of existing regulatory frameworks in order to help globalization to take its roots. The unrestricted movement and flow of capital across the borders have resulted in the movement of goods, services and investments across the markets. This has also triggered further expansion of international businesses as organizations shifted their headquarters to places where accounting standards were different. Due to the relocation of business operations, organizations had to prepare accounting statements according to the prevailing local accounting standards. The internationalization of the accounting standards and introduction of IFRS, therefore, are considered as part of the same process to allow the development of a uniform set of standards (Daske & Gibhardt, 2006). Various research studies have actually highlighted the importance of adapting IFRS as it is believed that a uniform set of accounting standards can improve the quality of reporting. Having same reporting standards would allow investors to better understand and evaluate the performance of the global firms and develop a unique insight. Though it has been suggested that estimating the overall importance and how a uniform set of standards can actually improve the quality of reporting may be too early (Jacob & Madu, 2009). It has also been argued that fair value accounting practices under the IFRS have also created much fear at the organizational level. It has been argued that fair accounting revaluation of assets under the IFRS has resulted in a drastic reduction in the values of the assets. This reduction in the value of assets, therefore, has diluted the balanced sheets of the firms and further resulted in worsening of financial crisis in developed countries. Accounting standards made under the historical cost concepts may have been more suitable in order to allow organizations to report their assets and liabilities at the right values (Smith, Boje, & Melendrez, 2010). At the global level, there are two sets of accounting sta
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(International Financial Reporting Standards Dissertation)
With a lot of economic failures cases related to security fraud and manipulation through the use of fraudulent accounting policies and rules in international corporations, it is essential to understand the business practises that have led to loose of shareholders investments.
Most of the officials of the companies that follow various accounting standards embrace the aforementioned procedure with the anticipation that their financial statements can be recorded or measured in an efficient manner. One of the major advantages that can be identified in relation to harmonisation and standardisation of the accounting standards is that the process facilitates to develop the world economy by increasing international business transactions by a considerable level.
Many companies worldwide have adopted its standards and even American companies have bee allowed to format their financial reports according to IFRS (US Securities and Exchange, 2007). Differences in financial reporting is tantamount to transactions being recorded in various ways.
nancial ratios. To ?ll this gap, the current researcher examines the impacts resident in the adoption of IFRS in aims listed companies in UK (Ball, 2006). The results of the study show that the adoption of IFRS changes the magnitude of the key accounting ratios.
IFRS was introduced in 2005 by the European Union and the quoted companies in the UK are required to adopt IFRS in their financial reporting. The discussion covers the level of compliance with IFRS by the companies and the disclosure of the accounting policies as per the IAS and other information in the implementation.
Fixed Tangible assets forms an important line item in the Balance Sheet of any company especially in the case of a manufacturing concern. As per the International Accounting Standard (IAS) 16 Property, Plant and Equipment, items pertaining to various classes of property, plant and equipment shall be classified as assts when the following two conditions are fulfilled It is probable that the future economic benefits, associated with the assets will flow to the entity and; The cost of the asset can be measured reliably  The important thing to consider at the time of recognition of fixed asset is the identification of the relevant cost based on which the asset should be capitalized in the bala
Today, IFRS has been adopted by most of the nations owing to its benefits concerning the accuracy of a company’s financial viability. Some of the remarkable benefits of IFRS can be identified as its assistance to the investors along with other users of the financial statements by maintaining transparency and higher degree of accuracy in treating the financial elements which further attempts to improve the quality of the information.
When the whole system is in harmony and in synchronization, the small change gets distributed easily and rapidly. The accounting standards for the Small and Medium Scale Enterprises (SME) are going through such a phase of standardisation. Instead of following the GAAP or the full IFRS standards, the UK Small and Medium Scale Enterprises are adopting new IFRS standards designed and customised for SMEs only.
This study indicates that financial conservatism is critical to set an effective corporate governance system in any firm. The cases study of ECB, Alcatel-Lucent, and Ericsson presented here support this evidence, although the test sample is narrow. We have provided evidence that financial conservatism is independent of financial distress.
46 Pages(11500 words)Dissertation
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