International Financial Reporting Standards - PowerPoint Presentation Example

International Financial Reporting Standards International Financial Reporting Standards s International Financial Reporting Standards (IFRS) is a set of accounting standards established by a free, non- profit association called the International Accounting Standards Board (IASB). The objective of IFRS is to give a global structure to how public organizations organize and unveil their financial statements. IFRS gives general direction to the preparation of financial statements, as opposed to setting regulations for industry-particular reporting. Having a universal standard is particularly important for vast organizations that have subsidiaries in various nations. Receiving a single set of overall guidelines will simplify accounting procedures by permitting an organization to utilize one reporting dialect all through. A single standard will also provide investors and auditors with a cohesive view of finances.  As of now, more than 100 nations allow or oblige IFRS for open organizations, with more nations anticipated that would move to IFRS by 2015. Advocates of IFRS as a worldwide standard keep up that the expense of executing IFRS could be balanced by the potential for compliance to enhance credit scores. IFRS is at times mistaken for IAS (International Accounting Standards), which are older principles that IFRS has substituted. List of International Financial Reporting Standards: The list of the International Financial Reporting Standards (IFRSs) and official interpretations are set out by the IFRS Foundation. It incorporates accounting standards either created or embraced by the International Accounting Standards Board (IASB), the standard-setting assortment of the IFRS Foundation. The IFRS incorporate International Financial Reporting Standards (IFRSs)—grew by the IASB; International Accounting Standards (IASs)—received by the IASB; Interpretations began from the International Financial Reporting Interpretations Committee (IFRICs); and Standing Interpretations Committee IFRS 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IFRS 2 Members’ Shares in Co-operative Entities and Similar Instruments IFRS 3 Emission Rights IFRS 4 Determining whether an Arrangement contains a Lease IFRS 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds IFRS 6 Liabilities arising from Participating in a Specific Market—Waste Electrical and Electronic Equipment IFRS 7 Approach under IAS 29 Financial Reporting in Hyperinflationary Economies IFRS 8 Scope of IFRS 2 IFRS 9 Reassessment of Embedded Derivatives IFRS10 Interim Financial Reporting and Impairment IFRS11 IFRS 2-Group and Treasury Share Transactions IFRS12 Service Concession Arrangements IFRS13 Customer Loyalty Programmes IFRS14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Conceptual Framework Conceptual Framework sets out concurred ideas that underlie financial reporting -objective, qualitative attributes and element definitions. IASB utilizes Conceptual Framework to set standards Enhances consistency across standards enhances consistency over time as Board individuals changes provides standards for judgments Preparers use Conceptual Framework to create accounting policies in the absence of particular standard or interpretation. Conceptual Framework sets out the ideas that underlie IFRS financial statements and support the IASB in the improvement of future IFRSs and in its survey of existing IFRSs. Qualitative Characteristics: If financial information is to be valuable, it must be important and faithfully represent what it purports to represent -Financial data without both significance and dependable representation is not helpful, and it cant be made valuable by being more similar, undeniable, convenient or justifiable. The value of financial data is improved on the off chance that it is comparable, understandable, convenient and justifiable (ie improving qualities—less discriminating yet at the same time exceptionally alluring) -Financial data that is significant and reliably spoken to may in any case be valuable regardless of the possibility that it doesnt have any of the improving subjective attributes. Fundamental qualitative characteristics Relevance: proficient in making a alteration in users’ verdicts predictive value confirmatory value materiality (entity-specific) Faithful representation: devotedly represents the phenomena it significances to represent completeness (depiction including numbers and words) neutrality (unbiased) free from error (ideally) Enhancing Qualitative Characteristics Comparability: like things twin; distinctive things look changed Verifiability: educated and autonomous spectators could achieve agreement, yet not so much finish understanding, that a portrayal is an unwavering representation Timeliness: having data accessible to chiefs in time to be fit for impacting their choices Understandability: Classify, describe, and present data obviously and Framework-based understanding provides… 50 • A strong comprehension of IFRSs – Framework encourages reliable and sensible definition of IFRSs • A premise for judgment in applying IFRSs – Framework made the ideas that underlie the appraisals, judgments and models on which IFRS money related explanations are based • A premise for consistently upgrading IFRS Structure of a framework based understanding Recognition principle: Accrual premise of accounting -recognise component when fulfil definition and distinguishment criteria • Recognise thing that meets component definition when –probable that advantages will stream to/from the element –has cost or worth that can measured dependably Measurement concept Measurement is the procedure of deciding money related sums at which components are perceived and conveyed. • To an extensive degree, money related reports are in view of evaluations, judgements and models instead of careful delineations. The Framework creates the ideas that underlie those evaluations, judgements and models • IASB guided by target and subjective attributes when indicating estimations. Presentation and disclosure concept: Budgetary articulations depict monetary impacts of exchanges and occasions by: – grouping into expansive classes (the components, eg resource) – sub-group components (eg resources sub-ordered by their temperament or capacity in the business) Derecognition of assets concept • Derecognition of a benefit alludes to when an advantage beforehand perceived by a substance is expelled from the elements announcement of monetary position • Derecognition prerequisites are indicated at the gauges level. • Derecognition does not so much happen when the benefit no more fulfils the conditions determined for its introductory distinguishment •IASB guided by target, subjective qualities and components In UAE, the bookkeeping calling is spoken to by the Accountants and Auditors Association. In the UAE organizations set up their yearly budgetary explanations inside 2 to 3 months of the end of the monetary year. For the banking industry, as indicated by Central Bank Circular No 20/99, banks, monetary foundations and venture organizations in the UAE are obliged to set up their money related explanations as per the International Accounting Standards with impact from January 1, 1999. In 2006, the Dubai International Financial Centre legitimate system obliges banks and organizations recorded on the Dubai International Foreign Affairs to execute IFRS. All banks recorded on DFM are obliged to set up their monetary explanations as TRADE The UAEs trade with industrialized countries has as of now been highlighted. It is certain that this relationship brings a weight on the UAE to embrace westernized types of responsibility and money related reporting, especially those of its "persuasive exchanging partner(s)". With the UAEs exchange joins with Europe being stronger than those with the US14, and with the European Union (EU) obliging that the combined records of all its recorded organizations receive IFRS from 1 January 2005, the UAEs prerequisite that banks and organizations recorded with its DIFX ought to apply IFRS is justifiable. CAPITAL MARKETS Nearby the goals of the UAE to create itself as a global capital business sector ready to pull in Foreign Direct Investment (FDI), there are necessities for a globalized set of bookkeeping principles which guarantee dependable, solid money related data about companies. The opening of the DIFX in September 2005 further settled the UAE as globalized country. Not just does the foundation of the DIFX encourage the development of outside interest in the UAE; however it likewise strengthens the requirement for the UAE to exhibit honesty, straightforwardness and effectiveness by receiving a set of IFRS and building an administrative administration to go hand in hand with them WORLD BANK The drive towards the selection of IFRS, additionally advanced by the World Bank which is in light of "standards of financial objectivity" that are intended to accomplish worldwide harmonization" BIG 4 ACCOUNTING FIRMS In the UAE, Big 4 bookkeeping firms oblige customers to present their money related reports under IFRS, while other bookkeeping firms working in the UAE "have been empowering their customers, with significant accomplishment, to get ready records under IASs (IFRS) TRADE PARTNERS As indicated by an institutional viewpoint, associations demonstrated after different associations in their field are seen to be more true blue and effective, and this is particularly essential in circumstances of vulnerability. Associations would prefer not to emerge as being diverse, and they consequently act in ways that are socially adequate. The more associations (or countries) that show specific types of conduct, the more weight there will be on different associations (or countries) to duplicate that conduct The UAE, coercive weights highlight legitimizing power on the premise of congruity with universally adequate formal standards and regulations or the casual desires of multinational partnerships. Standardizing weights rest their cases for authenticity on deeper, good values and the predominance of worldwide expert bookkeeping firms, while mimetic institutional powers work towards the similarity of country states monetary reporting conduct with that of other fruitful country states, regularly their exchanging accomplices. While these weights sound unique, actually they are not effectively unraveled. For the UAE as a country state, exhibiting similarity with these weights has included taking part in the worldwide dispersion of IFRS by their direct reception, and by the way of life of regulation and budgetary responsibility, apparently a western develop, that by need has needed to go with them at an authoritative field and hierarchical level. These institutional weights add to the pervasive worldwide dispersion of IFRS. References Works.bepress.com,. (2015). "The rationale and impact of the adoption of International Financial Re" by H. J. Irvine, et al.. Retrieved 7 March 2015, from http://works.bepress.com/helen_irvine/44/ Wikipedia,. (2015). Conceptual framework. Retrieved 7 March 2015, from http://en.wikipedia.org/wiki/Conceptual_framework SearchSecurity.co.UK,. (2015). What is IFRS (International Financial Reporting Standards)? - Definition from WhatIs.com. Retrieved 7 March 2015, from http://searchsecurity.techtarget.co.uk/definition/IFRS-International-Financial-Reporting-Standards SearchSecurity.co.UK,. (2015). What is IFRS (International Financial Reporting Standards)? - Definition from WhatIs.com. Retrieved 7 March 2015, from http://searchsecurity.techtarget.co.uk/definition/IFRS-International-Financial-Reporting-Standards Google.com.pk,. (2015). Retrieved 7 March 2015, from https://www.google.com.pk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=rja&uact=8&ved=0CFAQFjAJ&url=https%3A%2F%2Fwww.surveymonkey.com%2Fs%2FNYM6JDY&ei=7Rn7VJ-pDcr3UuXKgJgE&usg=AFQjCNFkxCcbZF-ygu87JvjU82YKQGOkvQ&sig2=-UlvEYKhtLn3nT_vXJCaeg Google.com.pk,. (2015). Retrieved 7 March 2015, from https://www.google.com.pk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CCkQFjAC&url=http%3A%2F%2Fro.uow.edu.au%2Fcgi%2Fviewcontent.cgi%3Farticle%3D1229%26context%3Dcommpapers&ei=lxn7VNvzCMKxUfuRgcAM&usg=AFQjCNF8Zxzh3UMvhc3DfwvqGmW5tfYyyg&sig2=mYQegYyundGAWS6zC7AWEw Google.com.pk,. (2015). Retrieved 7 March 2015, from https://www.google.com.pk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CCkQFjAC&url=http%3A%2F%2Fro.uow.edu.au%2Fcgi%2Fviewcontent.cgi%3Farticle%3D1229%26context%3Dcommpapers&ei=lxn7VNvzCMKxUfuRgcAM&usg=AFQjCNF8Zxzh3UMvhc3DfwvqGmW5tfYyyg&sig2=mYQegYyundGAWS6zC7AWEw Google.com.pk,. (2015). Retrieved 7 March 2015, from https://www.google.com.pk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDAQFjAD&url=http%3A%2F%2Fwww.adoptifrs.org%2FCountryDescription.aspx%3FCID%3D222&ei=NRr7VLmfH4brUq6-hJgM&usg=AFQjCNFgDfPOXEwTSh5dos56g-TYZBAF5A&sig2=LfL6RnbW4tyqwLlMx7vuig&bvm=bv.87611401,d.d24 Read More