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IFRS for Private Entities - Research Paper Example

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This research paper, IFRS for Private Entities, presents IFRSs for private entities (SMEs) which is commendable on the part of IASB. It reflects that IASB actually means business s in practical sense by spreading the culture of accounting standardization…
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IFRS for Private Entities
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Download file to see previous pages There is no doubt that accounting standardization among member nations of IASB will provide opportunities to listed companies to enlarge their horizons for raising funds and spreading business activities world over, as their financial statements will be in the same language as are understood in other parts of the world. It is also true that asking private entities (SMEs) to follow the same set of regulations, that have been developed keeping in view the needs of listed companies, is like putting the extra burden on SMEs. IFRSs are fast becoming the accounting language of businesses. Presently some countries have made it compulsory for all businesses to follow IFRSs irrespective of differences in their sizes, whereas some nations have made the application of IFRS mandatory only for listed companies. Under these circumstances is it advisable to develop a separate set of IFRS for SMEs when already some SMEs are following full IFRS in some nations?
The argument in favor of separate SMEs at this stage is that not all the nations have not yet made the application of IFRS mandatory. Even a country like the US is still making convergence efforts before the applicability is made mandatory. Secondly, demand for a separate set of IFRS for SMEs is not the issue that has arisen in 2008. IASB is working on the project since the year 2000. That means demand for separate IFRS for SMEs actually arisen even prior to that. Moreover, the objectivity of the conceptual framework is to help IASB in “promoting the harmonization of regulations, accounting standards, and procedures relating to the presentation of financial statements by producing the number of accounting treatments permitted by international standards.” Continuous discussions on different aspects of the issue were on during all these years and finally, a draft of IFRS for SMEs was circulated in February 2007.  ...Download file to see next pagesRead More
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