...ABSTRACT First Adoption of International Financial Reporting Standards sets out the procedures that an entity must follow when it adopts IFRS for the first time as the basis for preparing its general purpose financial statements. An entity may be first adopter if, in the preceding year, it prepared IFRS financial statements for internal management use, as long as those IFRS financial statements were not made available to external parties such as investors or creditors. In Malaysian data, IFRS standards are yet to be implemented. However, the results are of significant benefit for local standard setters as well as for other emerging countries that have similar capital market and institutional characteristics. More research could be conducted in other environments so that the impact of IFRS adoption in different environments can be revealed. Furthermore, additional studies can also consider other attributes of earnings quality such as earnings conservatism, predictability, comparability, persistence and timeliness. INTRODUCTION Mazars is a universal audit, accounting and discussing group employing more than 13,500 professionals in 71 countries through member firms. Mazars is the 11th largest accounting firm in the world. Mazars has a network of equivalent partners and joint ventures in a further 21 countries and is a founding member of the Praxity alliance, a network of independent firms. The Institute of Chartered Accountants in England and Wales (ICAEW)...
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...IFRS Convergence: Challenges and Implementation Approaches for Banks in India KPMG IN INDIA Foreword I am very happy to note that KPMG in India is releasing a specific publication for the Indian banking sector titled 'IFRS Convergence: Challenges and Implementation Approaches for Banks in India', on the occasion of the IBA/KPMG conference on 'IFRS: Developing a Roadmap to Convergence for the Indian Banking Industry'. The proposed convergence with IFRS is likely to create significant challenges. Most importantly, the initial and ongoing IFRS convergence will affect reported networth, available capital and capital adequacy for Indian banks. In view of the above, the release of this publication could not have been better timed. Through this publication, KPMG has provided a good perspective of some key areas which would impact the banking sector in India on their road to IFRS convergence. Further, the publication also brings out the specific challenges, particularly for the banking sector in India and the approach that the banks need to follow for successful implementation. Banks in India need to start thinking through the challenges and develop a roadmap for successful convergence at the earliest. I am hopeful that the publication will be able to ignite thoughts in today's bankers to be prepared for the IFRS reporting framework tomorrow. Dr K Ramakrishnan Chief Executive Indian Banks’ Association IFRS Convergence: Challenges and Implementation Approaches for Banks...
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...US GAAP versus IFRS The basics December 2011 !@# Table of contents Introduction .....................................................................2 Financial statement presentation......................................4 Interim financial reporting ................................................6 Consolidation, joint venture accounting and equity method investees .............................................................7 Business combinations ...................................................11 Inventory .......................................................................13 Long-lived assets ...........................................................14 Intangible assets ............................................................16 Impairment of long-lived assets, goodwill and intangible assets ............................................................18 Financial instruments .....................................................20 Foreign currency matters ...............................................28 Leases ...........................................................................30 Income taxes..................................................................33 Provisions and contingencies ..........................................35 Revenue recognition.......................................................37 Share-based payments ...................................................39 Employee benefits other than share-based payments ......41 Earnings...
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...gtgifrs.com: 1 IFRS IMPLEMENTATION AND CHALLENGES IN INDIA By Vandana Saxena Poria, OBE CEO, Get Through Guides Published in MEDC Monthly Economic Digest – August 2009 issue Need for universal GAAP In recent times, capital markets have become global and continue to expand. Moreover, there has been significant globalisation of production and trade. Investors can trade shares and securities worldwide. Entities are in a position to access the funds globally in the most advantageous markets. For this, investors from all over the world rely upon financial statements before taking decisions. They need to be convinced that the financial statements are true and fair and what they understand from the statements is what the person preparing them intends to convey. However, different countries adopt different accounting treatments and disclosure patterns with respect to the same economic event. This may create confusion among the users while interpreting the financial statements. Financial statements that are based on a single, universally accepted and used GAAP will enable the world to exchange financial information in a meaningful and trustworthy manner. This will accelerate the globalisation of finance. Adoption of IFRS worldwide and in India The use of International Financial Reporting Standards (IFRS) as a universal financial reporting language is gaining momentum across the globe. Several countries have implemented IFRS and converged their national GAAP to IFRS. More than 100 countries...
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...International Financial Reporting Standards (IFRS) MBA 691: Managerial Accounting Professor: Prepared by: April 19, 2009 Bibliography: • Ernst & Young, “U.S. GAAP vs. IFRS: The basics”, January 2009. • Securities & Exchange Commission, “Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers”, www.sec.gov/spotlight/ifrsroadmap.htm (Release No. 33-8982; November 14, 2008). • The Association of Chartered Certified Accountants (ACCA), “Impact of IFRS in Europe”, www.accaglobal.com/publicinterest/activities/research/reports/global_integration/, October 7, 2008. • Internal Auditor, magazine, “Getting Up To Speed with IFRS’, October 2008. • International Accounting Standards Board, “IASB Responds to G20 Recommendation and US GAAP Guidance’, www.iasb.org/News/Press+Releases/IASB+Responds+to+G20+Recommendations+and+US+GAAP+Guidance.htm, April 7, 2009. • EU Finance Ministers Statement, www.eu2009.cz/en/news-and-documents/news/statement-by-the-informal-ecofin-15621/ , April 4, 2009. • National Association of Corporate Directors (NACD) – Directors Monthly article, “IFRS – What The Board Needs to Know”, http://www.deloitte.com/dtt/cda/doc/content/us_assur_IFRS_DM%20Sep08_20080911pdf.pdf, September 2008. • Deloitte, www.deloitte.com/us/debates/IFRS. • Deloitte, “IFRS Conversion: Front or back Burner?”...
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...REPORTING AND COST CONTROL GROUP-3 PRESENTED BY:AKSHAY ESHAA RANJAN SAI CHARAN SHARATHCHANDRA H J VIKASH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) CONTENTS :INTRODUCTION OBJECTIVES OF IFRS STANDARDS OF IFRS WHY IFRS IS PREPARED ? ADVANTAGES AND DISADVANTAGES INDIAN ACCOUNTING STANDARDS Differences between ifrs , ind gaap and us gaap INTRODUCTION :- IFRS is set if international accounting standards developed by IASB (International Accounting Standard Board) under the governance if IFRS to set a high quality accounting standards. There are 120 nations who are following IFRS. WHAT IS IFRS ? International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. OBJECTIVES OF IFRS To develop, in the public interest, a single set of high quality and globally accepted financial accounting standards. It is to promote the use and rigorous application of those standards. Transparent for all users and comparable over all periods. Provides a suitable starting point for accounting in accordance with IFRS. Can be generated at a cost that does not exceed the benefits. WHY IS IFRS NECESSARY ? It is believed that IFRS, when adopted worldwide, will benefit investors and other users of financial statements by reducing cost of investments and increasing the quality of information...
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...IFRS Section 1 As a result to the 1988 policy statement that the Securities and Exchange Commission (SEC) issued, regarding the establishment of a common international accounting standards, there has been a growing acceptance of International Financial Reporting Standards (IFRS) for a basis of U.S. financial reporting. The number of countries adapting to this convergence has increased since its first suggestion. Within the United States, the SEC is taking its first steps as to whether or not the U.S. is to converge in to this universal approach to accounting. The international standard-setting process began a few decades ago as an effort by industrialized nations to create standards that could be used by developing and smaller nations unable to establish their own accounting standards, states the author of International Financial Reporting Standards. However, as the business world became more global, regulators, investors, large companies, and auditing firms began to realize the importance of having common standards in all areas of the financial reporting chain, continued the author. At this time, there are approximately 120 different nations that are required to, or have the option to report under IFRS. A few examples that already use IFRS include Australia, New Zealand, and Israel. It has been confirmed that the European Union has virtually adopted all international standards. Canada is said to adapt to IFRS in 2011, with Mexico following in 2012. The U.S. SEC has...
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...Comparing IFRS to GAAP Kerry Pettit ACC/291 October 25, 2015 Cameo Christopher Comparing IFRS to GAAP IFRS 8-1: IFRS and GAAP are similar when it comes to basic accounting and reporting issues that connect. With identification and measurement of allowance accounts, accounts receivables, recording discounts, and the reduction process to account for bad debt and factoring. However, FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) have taken steps to implement fair value measurement to financial instruments. As a result opposing factors, FASB and IASB have adopted a fragmentary approach. The first step the two have taken is disclosing the appropriate use information in the notes. Step two is the adoption of the fair market alternative that allows companies to record some financial instrument at fair value in financial statements (Kimmel, 2013). The third step is acknowledging the complexity and universality of recognizing the area of revenues in fiscal reporting. FASB and IASB have also collaborated in the development of a new single revenue recognition standard. Both FASB and IASB are of the opinion that transparency and comprehension of financial statements can increase if companies record and report all financial instruments at fair value. Some of the criticism on both FASB and IASB is that they represent a split model. The critics claim that some financial instruments state at fair value. Some loans and receivables (reported...
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...International Financial Reporting Standards Introduction: IFRS are a set of rules developed and issued by IASB (International Accounting Standards Board) which is an independent body based in London, England. These rules will apply uniformly to financial reporting by public entities worldwide. The adoption of IFRS is widespread around the world with 120 countries requiring public corporations to adapt IFRS. Accounting standards as we know are a modern development although its traces date back 500 years. They are very important in today’s world in which the ownership and control of firm are different. The Role of Accounting Standards: Accounting standards are very important for the smooth functioning of capital markets. The managers are better informed than outside parties about the data and performance of the firm. However the outside parties control the capital which they can provide to the firm provided they rest assured about the sound quality of financials of the firm so as to ensure the safety of their capital. The more the safety, the less will be the cost of capital to the firm as the creditors and third parties will demand less rate of return. So the managers need to adhere to accounting standards and get it audited by professional auditors so as to ensure the true and fair picture of business. Hence the accounting standards dictate the allocation of capital in complex capital markets and economies. Benefits of IFRS 3.1 Countries: Different accounting standards are adapted...
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...The mission and goal of IASB was to provide a sustainable framework in that members of different nations can follow called the IFRS. IFRS is presented to profit-oriented entities whiter private or public; which is the development of a single set of high quality, understandable and enforceable global accounting standards. In doing so, financial reporting will be leveled, and international transactions as well as investors can assure their decisions and provide statements under fair value measurement. The collaboration of FASB and IASB, will be one of the most important changes in financial reporting to take place in years; best of both worlds as I would like to call it. The convergence of US GAAP to IFRS will bring have a major impact in our financial system. Accountants and regulatory bodies from all over the world are advocates of the convergence to IFRS; The SEC if fully supporting the adoption and believes that the convergence will not only simplify financial reporting but will beneficial for US investors. Since the SEC is main commander in this decision it has provided a roadmap in allowing US companies to begin using IFRS framework in preparing financial statements. There hasn't been a specific launch date, but it was mentioned that by 2015; the convergence should be finalized. As business continue going global and relations with other countries are essential for our world economy; financial reporting and the adoptiion of a single set of accounting standards becomes...
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...Inventories IFRS and GAAP adopts different rules Inventory for using lower of the market method. Under GAAP, an entity should first pick the medium number amongst market ceiling (net realizable value, market floor (net realizable value minus normal profit), and replacement cost. Then compare that medium number with the cost of the inventory. Under IFRS, one only needs to compare the market ceiling value with the cost of inventory. According to the 2013, AT&T includes its inventory in “other current assets” on the balance sheet, which are valued at the lower of cost or market. Telecom Italia lists its inventory as a line item under current assets. It also adopts lower of the cost or market to evaluate its inventories. It is a one-step test by simply comparing the market ceiling value and the cost of inventory. Telecom Italia wrote down by 4 million based on the adjustment to estimated realizable value of its fixed asset. Leases The guidance for distinguish operating and financial leases are similar under IFRS & GAAP. GAAP has a more detailed guidance for capital lease. They have dissimilarities for rules over sale-lease back. Telecom Italia should refer to IAS 17 for its lease reporting, while AT&T should refer to ASC 840 for its financial reporting. Capital lease is “finance lease” under IFRS. Compared to Telecom Italia, the capital lease of AT&T is not significant because of the strict rule for a lessor to claim a capital asset under GAAP. The accounting...
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...Overview International Financial Reporting Standards (IFRS) were established by International Accounting Standard Board to promote the use of global accounting standards so that company accounts are comparable and understandable across the countries. As of August 2012 more than 120 countries require or allow the use of IFRS for their financial reporting. An entity claiming compliance with IFRS should comply with all its standards including disclosure requirements and makes a explicit statement of compliance of IFRS.The most important requirement of IFRS is that the financial statement of the company should reflect the true and fair view of its business. Canadian publicly accountable entities will be required to adopt IFRSs for their fiscal years beginning on or after January 1, 2011, and, for a calendar year-end entity, its first IFRS annual and interim financial statements are required to be prepared in compliance with all active standards and interpretations as at December 31, 2011. IFRS FRAMEWORK Qualitative Characteristics • Understandable – Users with basic knowledge of business and accounting on putting reasonable effort should be able to understand financial statements. • Comparable – Financial statements should be consistent across firms and across time. • Relevance – A relevant information is one which can affect user’s economic decision or influence future idea. Information should be timely and sufficiently detailed in order to be relevant. • Reliable...
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...2009 International Accounting Standards Board (IASB® ) IFRS for SMEs ® International Financial Reporting Standard (IFRS®) for Small and Medium-sized Entities (SMEs) International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) The International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) is issued by the International Accounting Standards Board (IASB), 30 Cannon Street, London EC4M 6XH, United Kingdom. Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: iasb@iasb.org Web: www.iasb.org The International Accounting Standards Committee Foundation (IASCF), the authors and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise. The IFRS for SMEs and its accompanying documents are published in three parts: ISBN for this part: 978-1-907026-17-1 ISBN for complete publication (three parts): 978-1-907026-16-4 Copyright © 2009 IASCF All rights reserved. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IASCF. International Financial Reporting...
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...Non-Adoption of IFRS The United States (US) should not adopt the International Financial Reporting Standards (IFRS) as a replacement for the Generally Accepted Accounting Principles (GAAP) we currently follow. The basic concept of the IFRS is to provide the reporting standards for global financial organizations and the framework on how to disclose their financial statements in a general format, similar to a template from a software program. The argument has been made about the need for a one set of standards due to the need of global companies (corporations). The simplification of accounting standards into a one language, one format for the purpose of credit ratings, is very questionable. GAAP is the standard for the US and the US dollar is still the driving force for the world economies. The question of stability and going concern arises when comparing the Euro dollar against the US dollar. The Euro dollar is suffering along with the European Union. Lately, their joint venture has been on very shaky ground. Is America willing to give up control of its accounting authority, interpretation, and leadership in the world economy? This is the equivalent of the U.S. giving up most of their military control to the “blue helmets” -- the United Nations personal army. Surely, these “blue helmets” will not advocate America’s interest first above all the other nations. The first argument against the adoption of IFRS is based on the standards. IFRS standards are...
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...IFRS: Property, Plant, and Equipment 07-05-2011 22:27:18 Aset tetap atau PPE (Property, Plant, and Equipment) adalah aset berwujud (tangible assets) yang digunakan dalam kegiatan operasional perusahaan, yang memiliki manfaat lebih dari satu periode akuntansi. Istilah aset tetap digunakan untuk membedakan dengan aset tidak berwujud, yang juga memiliki masa manfaat lebih dari satu periode akuntansi tetapi tidak memiliki wujud fisik, serta nilainya tidak sepenuhnya dipengaruhi oleh eksistensi fisik dari aset. Dalam standar akuntansi yang mengacu ke Amerika (US GAAP), akuntansi untuk aset tetap relatif tidak menimbulkan banyak masalah, karena standar akuntansi aset tetap berdasar US GAAP menggunakan basis kos historis. IFRS tidak menggunakan basis kos historis, mengingat basis kos historis berimplikasi pada penyajian laporan keuangan yang dipandang kurang relevan dengan kebutuhan nyata pengguna informasi karena tidak mampu menggambarkan nilai riil aset tetap yang disajikan di dalam laporan keuangan. Artikel ini tidak dimaksudkan untuk membahas secara detil seluruh aspek teknis akuntansi atas aset tetap, tetapi dimaksudkan untuk mendeskripsikan aspek-aspek umum akuntansi aset tetap yang membedakan antara US GAAP dengan IFRS. Secara umum permasalahan akuntansi aset tetap yang akan dibahas dalam artikel ini adalah mencakup prinsip-prinsip dasar akuntansi aset tetap sebagai berikut: 1. Akuntansi perolehan aset tetap 2. Akuntansi alokasi kos aset tetap ke masing-masing periode...
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