International Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework 1 adopted by the International Accounting Standards Board (IASB) Many oI the standards Iorming part oI IFRS are known by the older name oI International Accounting Standards (IAS) On 1 April 2001, the new IASB took over the responsibility oI setting international accounting standards.
International Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework 1 adopted by the International Accounting Standards Board (IASB) Many oI the standards Iorming part oI IFRS are known by the older name oI International Accounting Standards (IAS) On 1 April 2001, the new IASB took over the responsibility oI setting international accounting standards.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
International Financial Reporting Standards (IFRS) are principles-based Standards, Interpretations and the Framework 1 adopted by the International Accounting Standards Board (IASB) Many oI the standards Iorming part oI IFRS are known by the older name oI International Accounting Standards (IAS) On 1 April 2001, the new IASB took over the responsibility oI setting international accounting standards.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
International Financial Reporting Standards (IFRS) are principles-based
Standards, Interpretations and the Framework |1| adopted by the International Accounting Standards Board (IASB). Many oI the standards Iorming part oI IFRS are known by the older name oI International Accounting Standards (IAS). IAS were issued between 1973 and 2001 by the Board oI the International Accounting Standards Committee (IASC). On 1 April 2001, the new IASB took over Irom the IASC the responsibility Ior setting International Accounting Standards. During its Iirst meeting the new Board adopted existing IAS and SICs. The IASB has continued to develop standards calling the new standards IFRS. Contents |hide| 1 Structure oI IFRS 2 Framework 3 Role oI Framework 3.1 Objective oI Iinancial statements 3.2 Underlying assumptions 3.3 Qualitative characteristics oI Iinancial statements 3.4 Elements oI Iinancial statements 3.5 Recognition oI elements oI Iinancial statements 3.6 Measurement oI the Elements oI Financial Statements 3.7 Concepts oI Capital and Capital Maintenance 3.8 Concepts oI Capital 3.8.1 Concepts oI Capital Maintenance and the Determination oI ProIit 4 Requirements oI IFRS 5 IASB current projects 6 Adoption oI IFRS 6.1 Australia 6.2 Canada 6.3 European Union 6.4 Hong Kong 6.5 India 6.6 Japan 6.7 Pakistan 6.8 Russia 6.9 Singapore 6.10 South AIrica 6.11 Turkey 7 List oI IFRS statements with Iull text link 8 List oI Interpretations with Iull text link 9 See also 10 ReIerences 11 Further reading 12 External links edit] Structure of IFRS IFRS are considered a "principles based" set oI standards in that they establish broad rules as well as dictating speciIic treatments. International Financial Reporting Standards comprise: International Financial Reporting Standards (IFRS)standards issued aIter 2001 International Accounting Standards (IAS)standards issued beIore 2001 Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC)issued aIter 2001 Standing Interpretations Committee (SIC)issued beIore 2001 Framework for the Preparation and Presentation of Financial Statements IAS 8 Par. 11 "In making the fudgement described in paragraph 10, management shall refer to, and consider the applicability of, the following sources in descending order. (a) the requirements and guidance in Standards and Interpretations dealing with similar and related issues, and (b) the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the 7,2047" edit] Framework The Framework Ior the Preparation and Presentation oI Financial Statements states basic principles Ior IFRS. The IASB and FASB Frameworks are in the process oI being updated and converged. The Joint Conceptual Framework project aims to update and reIine the existing concepts to reIlect the changes in markets, business practices and the economic environment that have occurred in the two or more decades since the concepts were Iirst developed. Its overall objective is to create a sound Ioundation Ior Iuture accounting standards that are principles-based, internally consistent and internationally converged. ThereIore the IASB and the US FASB (the boards) are undertaking the project jointly. edit] Role of Framework Deloitte states: In the absence of a Standard or an Interpretation that specifically applies to a transaction, management must use its fudgement in developing and applying an accounting policy that results in information that is relevant and reliable In making that fudgement, IAS 811 requires management to consider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework This elevation of the importance of the Framework was added in the 2003 revisions to IAS 8. |2|
edit] Objective of financial statements A Iinancial statement should reIlect true and Iair view oI the business aIIairs oI the organization. As these statements are used by various constituents oI the society / regulators, they need to reIlect true view oI the Iinancial position oI the organization. edit] Underlying assumptions The underlying assumptions used in IFRS are: Accrual basis: the eIIect oI transactions and other events are recognized when they occur, not as cash is gained or paid. Going concern: an entity will continue Ior the Ioreseeable Iuture. Stable measuring unit assumption: Iinancial capital maintenance in nominal monetary units or traditional Historical cost accounting; i.e., accountants consider changes in the purchasing power oI the Iunctional currency up to but excluding 26 per annum Ior three years in a row (which would be 100 cumulative inIlation over three years or hyperinIlation as deIined in IFRS) as immaterial or not suIIiciently important Ior them to choose Iinancial capital maintenance in units oI constant purchasing power during low inIlation and deIlation as authorized in IFRS in the Framework, Par 104 (a). Accountants implementing the stable measuring unit assumption (traditional Historical Cost Accounting) during annual inIlation oI 25 Ior 3 years in a row would destroy 100 oI the real value oI all constant real value non-monetary items not maintained under the Historical Cost paradigm. edit] Qualitative characteristics of financial statements Qualitative characteristics oI Iinancial statements include: Understandability Reliability Comparability Relevance True and Fair View/Fair Presentation edit] Elements of financial statements The Iinancial position oI an enterprise is primarily provided in the Statement oI Financial Position. The elements include: Asset: An asset is a resource controlled by the enterprise as a result oI past events Irom which Iuture economic beneIits are expected to Ilow to the enterprise. Liability: A liability is a present obligation oI the enterprise arising Irom the past events, the settlement oI which is expected to result in an outIlow Irom the enterprise' resources, i.e., assets. Equity: Equity is the residual interest in the assets oI the enterprise aIter deducting all the liabilities. Equity is also known as owner's equity. The Iinancial perIormance oI an enterprise is primarily provided in an income statement or proIit and loss account. The elements oI an income statement or the elements that measure the Iinancial perIormance are as Iollows: Revenues: increases in economic beneIit during an accounting period in the Iorm oI inIlows or enhancements oI assets, or decrease oI liabilities that result in increases in equity. However, it does not include the contributions made by the equity participants, i.e., proprietor, partners and shareholders. Expenses: decreases in economic beneIits during an accounting period in the Iorm oI outIlows, or depletions oI assets or incurrences oI liabilities that result in decreases in equity. edit] Recognition of elements of financial statements An item is recognized in the Iinancial statements when: it is probable Iuture economic beneIit will Ilow to or Irom an entity. the resource can be reliably measured - otherwise the stable measuring unit assumption is applied: i.e. it is assumed that the monetary unit oI account (the Iunctional currency) is perIectly stable (zero inIlation or deIlation); it is simply assumed that there is no inIlation or deIlation ever, and items are stated at their original nominal Historical Cost Irom any prior date: 1 month, 1 year, 10 or 100 or 200 or more years beIore; i.e. the stable measuring unit assumption is applied to items such as issued share capital, retained earnings, capital reserves, all other items in shareholders equity, all items in the income statement (except salaries, wages, rentals, etc., which are inIlation-adjuted annually), etc. edit] Measurement of the Elements of Financial Statements Par. 99. Measurement is the process oI determining the monetary amounts at which the elements oI the Iinancial statements are to be recognised and carried in the balance sheet and income statement. This involves the selection oI the particular basis oI measurement. pa Par. 100. A number oI diIIerent measurement bases are employed to diIIerent degrees and in varying combinations in Iinancial statements. They include the Iollowing: (a) Historical cost. Assets are recorded at the amount oI cash or cash equivalents paid or the Iair value oI the consideration given to acquire them at the time oI their acquisition. Liabilities are recorded at the amount oI proceeds received in exchange Ior the obligation, or in some circumstances (Ior example, income taxes), at the amounts oI cash or cash equivalents expected to be paid to satisIy the liability in the normal course oI business. (b) Current cost. Assets are carried at the amount oI cash or cash equivalents that would have to be paid iI the same or an equivalent asset was acquired currently. Liabilities are carried at the undiscounted amount oI cash or cash equivalents that would be required to settle the obligation currently. (c) Realisable (settlement) value. Assets are carried at the amount oI cash or cash equivalents that could currently be obtained by selling the asset in an orderly disposal. Assets are carried at the present discounted value oI the Iuture net cash inIlows that the item is expected to generate in the normal course oI business. Liabilities are carried at the present discounted value oI the Iuture net cash outIlows that are expected to be required to settle the liabilities in the normal course oI business. Par. 101. The measurement basis most commonly adopted by entities in preparing their Iinancial statements is historical cost. This is usually combined with other measurement bases. For example, inventories are usually carried at the lower oI cost and net realisable value, marketable securities may be carried at market value and pension liabilities are carried at their present value. Furthermore, some entities use the current cost basis as a response to the inability oI the historical cost accounting model to deal with the eIIects oI changing prices oI non-monetary assets. edit] Concepts of Capital and Capital Maintenance A major diIIerence between US GAAP and IFRS is the Iact that three Iundamentally diIIerent concepts oI capital and capital maintenance are authorized in IFRS while US GAAP only authorize two capital and capital maintenance concepts during low inIlation and deIlation: (1) physical capital maintenance and (2) Iinancial capital maintenance in nominal monetary units (traditional Historical Cost Accounting) as stated in Par 45 to 48 in the FASB Conceptual Satement N 5. US GAAP does not recognize the third concept oI capital and capital maintenance during low inIlation and deIlation, namely, Iinancial capital maintenance in units oI constant purchasing power as authorized in IFRS in the Framework, Par 104 (a) in 1989. edit] Concepts of Capital Par. 102. A Iinancial concept oI capital is adopted by most entities in preparing their Iinancial statements. Under a Iinancial concept oI capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity oI the entity. Under a physical concept oI capital, such as operating capability, capital is regarded as the productive capacity oI the entity based on, Ior example, units oI output per day. Par. 103. The selection oI the appropriate concept oI capital by an entity should be based on the needs oI the users oI its Iinancial statements. Thus, a Iinancial concept oI capital should be adopted iI the users oI Iinancial statements are primarily concerned with the maintenance oI nominal invested capital or the purchasing power oI invested capital. II, however, the main concern oI users is with the operating capability oI the entity, a physical concept oI capital should be used. The concept chosen indicates the goal to be attained in determining proIit, even though there may be some measurement diIIiculties in making the concept operational. edit] Concepts of Capital Maintenance and the Determination of Profit Par. 104. The concepts oI capital in paragraph 102 give rise to the Iollowing concepts oI capital maintenance: (a) Financial capital maintenance. Under this concept a proIit is earned only iI the Iinancial (or money) amount oI the net assets at the end oI the period exceeds the Iinancial (or money) amount oI net assets at the beginning oI the period, aIter excluding any distributions to, and contributions Irom, owners during the period. Financial capital maintenance can be measured in either nominal monetary units or units oI constant purchasing power. (b) Physical capital maintenance. Under this concept a proIit is earned only iI the physical productive capacity (or operating capability) oI the entity (or the resources or Iunds needed to achieve that capacity) at the end oI the period exceeds the physical productive capacity at the beginning oI the period, aIter excluding any distributions to, and contributions Irom, owners during the period. The three concepts oI capital deIined in IFRS during low inIlation and deIlation are: (A) Physical capital. See paragraph 102. (B) Nominal Iinancial capital. See paragraph 104. |3|
(C) Constant purchasing power Iinancial capital. See paragraph 104. |4|
The three concepts oI capital maintenance authorized in IFRS during low inIlation and deIlation are: (1) Physical capital maintenance: optional during low inIlation and deIlation. Current Cost Accounting model prescribed by IFRS. See Par 106. (2) Financial capital maintenance in nominal monetary units (Historical cost accounting): authorized by IFRS but not prescribedoptional during low inIlation and deIlation. See Par 104 (a) Historical cost accounting. Financial capital maintenance in nominal monetary units per se during inIlation and deIlation is a Iallacy: it is impossible to maintain the real value oI Iinancial capital constant with measurement in nominal monetary units per se during inIlation and deIlation. (3) Financial capital maintenance in units of constant purchasing power (Constant Item Purchasing Power Accounting): authorized by IFRS but not prescribedoptional during low inIlation and deIlation. See Par 104(a). Prescribed in IAS 29 |3| during hyperinIlation. Constant Purchasing Power Accounting |5|
Only Iinancial capital maintenance in units oI constant purchasing power per se can maintain the real value oI Iinancial capital constant during inIlation and deIlation in all entities that at least break evenceteris paribusIor an indeIinite period oI time. This would happen whether these entities own revaluable Iixed assets or not and without the requirement oI more capital or additional retained proIits to simply maintain the existing constant real value oI existing shareholders equity constant. Par. 105. The concept oI capital maintenance is concerned with how an entity deIines the capital that it seeks to maintain. It provides the linkage between the concepts oI capital and the concepts oI proIit because it provides the point oI reIerence by which proIit is measured; it is a prerequisite Ior distinguishing between an entity`s return on capital and its return oI capital; only inIlows oI assets in excess oI amounts needed to maintain capital may be regarded as proIit and thereIore as a return on capital. Hence, proIit is the residual amount that remains aIter expenses (including capital maintenance adjustments, where appropriate) have been deducted Irom income. II expenses exceed income the residual amount is a loss. Par. 106. The physical capital maintenance concept requires the adoption oI the current cost basis oI measurement. The Iinancial capital maintenance concept, however, does not require the use oI a particular basis oI measurement. Selection oI the basis under this concept is dependent on the type oI Iinancial capital that the entity is seeking to maintain. Par. 107. The principal diIIerence between the two concepts oI capital maintenance is the treatment oI the eIIects oI changes in the prices oI assets and liabilities oI the entity. In general terms, an entity has maintained its capital iI it has as much capital at the end oI the period as it had at the beginning oI the period. Any amount over and above that required to maintain the capital at the beginning oI the period is proIit. Par. 108. Under the concept oI Iinancial capital maintenance where capital is deIined in terms oI nominal monetary units, proIit represents the increase in nominal money capital over the period. Thus, increases in the prices oI assets held over the period, conventionally reIerred to as holding gains, are, conceptually, proIits. They may not be recognised as such, however, until the assets are disposed oI in an exchange transaction. When the concept oI Iinancial capital maintenance is deIined in terms oI constant purchasing power units, proIit represents the increase in invested purchasing power over the period. Thus, only that part oI the increase in the prices oI assets that exceeds the increase in the general level oI prices is regarded as proIit. The rest oI the increase is treated as a capital maintenance adjustment and, hence, as part oI equity. Par. 109. Under the concept oI physical capital maintenance when capital is deIined in terms oI the physical productive capacity, proIit represents the increase in that capital over the period. All price changes aIIecting the assets and liabilities oI the entity are viewed as changes in the measurement oI the physical productive capacity oI the entity; hence, they are treated as capital maintenance adjustments that are part oI equity and not as proIit. Par. 110. The selection oI the measurement bases and concept oI capital maintenance will determine the accounting model used in the preparation oI the Iinancial statements. DiIIerent accounting models exhibit diIIerent degrees oI relevance and reliability and, as in other areas, management must seek a balance between relevance and reliability. This Framework is applicable to a range oI accounting models and provides guidance on preparing and presenting the Iinancial statements constructed under the chosen model. At the present time, it is not the intention oI the Board oI IASC to prescribe a particular model other than in exceptional circumstances, such as Ior those entities reporting in the currency oI a hyperinIlationary economy. This intention will, however, be reviewed in the light oI world developments. |6|
edit] Requirements of IFRS Main article: Requirements oI IFRS IFRS Iinancial statements consist oI (IAS1.8) a Statement oI Financial Position a Statement oI Comprehensive Income or two separate statements comprising an Income Statement and separately a Statement oI Comprehensive Income, which reconciles ProIit or Loss on the Income statement to total comprehensive income a Statement oI Changes in Equity (SOCE) a Cash Flow Statement or Statement oI Cash Flows notes, including a summary oI the signiIicant accounting policies Comparative inIormation is required Ior the prior reporting period (IAS 1.36). An entity preparing IFRS accounts Ior the Iirst time must apply IFRS in Iull Ior the current and comparative period although there are transitional exemptions (IFRS1.7). On 6 September 2007, the IASB issued a revised IAS 1 Presentation oI Financial Statements. The main changes Irom the previous version are to require that an entity must: present all non-owner changes in equity (that is, 'comprehensive income' ) either in one Statement oI comprehensive income or in two statements (a separate income statement and a statement oI comprehensive income). Components oI comprehensive income may not be presented in the Statement oI changes in equity. present a statement oI Iinancial position (balance sheet) as at the beginning oI the earliest comparative period in a complete set oI Iinancial statements when the entity applies the new standatd. present a statement oI cash Ilow. make neccessary disclosure by the way oI a note. The revised IAS 1 is eIIective Ior annual periods beginning on or aIter 1 January 2009. Early adoption is permitted. edit] IASB current projects |7| . Much oI its work is directed at convergence with US GAAP. edit] Adoption of IFRS IFRS are used in many parts oI the world, including the European Union, Hong Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, South AIrica, Singapore and Turkey. As oI 27 August 2008, more than 113 countries around the world, including all oI Europe, currently require or permit IFRS reporting. Approximately 85 oI those countries require IFRS reporting Ior all domestic, listed companies. In addition, the US is also gearing towards IFRS. The SEC in the US is slowly but progressively shiIting Irom requiring only US GAAP to accepting IFRS and will most likely accept IFRS standards in the longterm. |8|
For a current overview see IAS PLUS's list oI all countries that have adopted IFRS. edit] Australia The Australian Accounting Standards Board (AASB) has issued 'Australian equivalents to IFRS' (A-IFRS), numbering IFRS standards as AASB 18 and IAS standards as AASB 101141. Australian equivalents to SIC and IFRIC Interpretations have also been issued, along with a number oI 'domestic' standards and interpretations. These pronouncements replaced previous Australian generally accepted accounting principles with eIIect Irom annual reporting periods beginning on or aIter 1 January 2005 (i.e. 30 June 2006 was the Iirst report prepared under IFRS-equivalent standards Ior June year ends). To this end, Australia, along with Europe and a Iew other countries, was one oI the initial adopters oI IFRS Ior domestic purposes (in the developed world). It must be acknowledged, however, that IFRS and primarily IAS have been part and parcel oI accounting standard package in the developing world Ior many years since the relevant accounting bodies were more open to adoption oI international standards Ior many reasons including that oI capability. The AASB has made certain amendments to the IASB pronouncements in making A-IFRS, however these generally have the eIIect oI eliminating an option under IFRS, introducing additional disclosures or implementing requirements Ior not-Ior- proIit entities, rather than departing Irom IFRS Ior Australian entities. Accordingly, Ior-proIit entities that prepare Iinancial statements in accordance with A-IFRS are able to make an unreserved statement oI compliance with IFRS. The AASB continues to mirror changes made by the IASB as local pronouncements. In addition, over recent years, the AASB has issued so-called 'Amending Standards' to reverse some oI the initial changes made to the IFRS text Ior local terminology diIIerences, to reinstate options and eliminate some Australian-speciIic disclosure. There are some calls Ior Australia to simply adopt IFRS without 'Australianising' them and this has resulted in the AASB itselI looking at alternative ways oI adopting IFRS in Australia edit] Canada The use oI IFRS will be required Ior Canadian publicly accountable proIit-oriented enterprises Ior Iinancial periods beginning on or aIter 1 January 2011. This includes public companies and other 'proIit-oriented enterprises that are responsible to large or diverse groups oI shareholders. |9|
edit] European Union All listed EU companies have been required to use IFRS since 2005. In order to be approved Ior use in the EU, standards must be endorsed by the Accounting Regulatory Committee (ARC), which includes representatives oI member state governments and is advised by a group oI accounting experts known as the European Financial Reporting Advisory Group. As a result IFRS as applied in the EU may diIIer Irom that used elsewhere. Parts oI the standard IAS 39: Financial Instruments: Recognition and Measurement were not originally approved by the ARC. IAS 39 was subsequently amended, removing the option to record Iinancial liabilities at Iair value, and the ARC approved the amended version. The IASB is working with the EU to Iind an acceptable way to remove a remaining anomaly in respect oI hedge accounting. The World Bank Centre Ior Financial Reporting ReIorm is working with countries in the ECA region to Iacilitate the adoption oI IFRS and IFRS Ior SMEs. edit] Hong Kong Starting in 2005, Hong Kong Financial Reporting Standards (HKFRS) are identical to International Financial Reporting Standards. While Hong Kong had adopted many oI the earlier IAS as Hong Kong standards, some had not been adopted, including IAS 32 and IAS 39. And all oI the December 2003 improvements and new and revised IFRS issued in 2004 and 2005 will take eIIect in Hong Kong beginning in 2005. Implementing Hong Kong Financial Reporting Standards: The challenge Ior 2005 (August 2005) sets out a summary oI each standard and interpretation, the key changes it makes to accounting in Hong Kong, the most signiIicant implications oI its adoption, and related anticipated Iuture developments. There is one Hong Kong standard and several Hong Kong interpretations that do not have counterparts in IFRS. Also there are several minor wording diIIerences between HKFRS and IFRS. |10|
edit] India The Institute oI Chartered Accountants oI India (ICAI) has announced that IFRS will be mandatory in India Ior Iinancial statements Ior the periods beginning on or aIter 1 April 2011. This will be done by revising existing accounting standards to make them compatible with IFRS. Reserve Bank oI India has stated that Iinancial statements oI banks need to be IFRS-compliant Ior periods beginning on or aIter 1 April 2011... The ICAI has also stated that IFRS will be applied to companies above Rs.1000 crore Irom April 2011. Phase wise applicability details Ior diIIerent companies in India: Phase 1: Opening balance sheet as at 1 April 2011* i. Companies which are part oI NSE Index NiIty 50 ii. Companies which are part oI BSE Sensex BSE 30 a. Companies whose shares or other securities are listed on a stock exchange outside India b. Companies, whether listed or not, having net worth oI more than INR1,000 crore Phase 2: Opening balance sheet as at 1 April 2012* Companies not covered in phase 1 and having net worth exceeding INR 500 crore Phase 3: Opening balance sheet as at 1 April 2014* Listed companies not covered in the earlier phases II the Iinancial year oI a company commences at a date other than 1 April, then it shall prepare its opening balance sheet at the commencement oI immediately Iollowing Iinancial year. On January 22, 2010 the Ministry oI Corporate AIIairs issued the road map Ior transition to IFRS. It is clear that India has deIerred transition to IFRS by a year. In the Iirst phase, companies included in NiIty 50 or BSE Sensex, and companies whose securities are listed on stock exchanges outside India and all other companies having net worth oI Rs 1,000 crore will prepare and present Iinancial statements using Indian Accounting Standards converged with IFRS. According to the press note issued by the government, those companies will convert their Iirst balance sheet as at April 1, 2011, applying accounting standards convergent with IFRS iI the accounting year ends on March 31. This implies that the transition date will be April 1, 2011. According to the earlier plan, the transition date was Iixed at April 1, 2010. The press note does not clariIy whether the Iull set oI Iinancial statements Ior the year 2011-12 will be prepared by applying accounting standards convergent with IFRS. The deIerment oI the transition may make companies happy, but it will undermine India`s position. Presumably, lack oI preparedness oI Indian companies has led to the decision to deIer the adoption oI IFRS Ior a year. This is unIortunate that India, which boasts Ior its IT and accounting skills, could not prepare itselI Ior the transition to IFRS over last Iour years. But that might be the ground reality. Transition in phases Companies, whether listed or not, having net worth oI more than Rs 500 crore will convert their opening balance sheet as at April 1, 2013. Listed companies having net worth oI Rs 500 crore or less will convert their opening balance sheet as at April 1, 2014. Un-listed companies having net worth oI Rs 500 crore or less will continue to apply existing accounting standards, which might be modiIied Irom time to time. Transition to IFRS in phases is a smart move. The transition cost Ior smaller companies will be much lower because large companies will bear the initial cost oI learning and smaller companies will not be required to reinvent the wheel. However, this will happen only iI a signiIicant number oI large companies engage Indian accounting Iirms to provide them support in their transition to IFRS. II, most large companies, which will comply with Indian accounting standards convergent with IFRS in the Iirst phase, choose one oI the international Iirms, Indian accounting Iirms and smaller companies will not beneIit Irom the learning in the Iirst phase oI the transition to IFRS. It is likely that international Iirms will protect their learning to retain their competitive advantage. ThereIore, it is Ior the beneIit oI the country that each company makes judicious choice oI the accounting Iirm as its partner without limiting its choice to international accounting Iirms. Public sector companies should take the lead and the Institute oI Chartered Accountants oI India (ICAI) should develop a clear strategy to diIIuse the learning. Size oI companies The government has decided to measure the size oI companies in terms oI net worth. This is not the ideal unit to measure the size oI a company. Net worth in the balance sheet is determined by accounting principles and methods. ThereIore, it does not include the value oI intangible assets. Moreover, as most assets and liabilities are measured at historical cost, the net worth does not reIlect the current value oI those assets and liabilities. Market capitalisation is a better measure oI the size oI a company. But it is diIIicult to estimate market capitalisation or Iundamental value oI unlisted companies. This might be the reason that the government has decided to use net worth` to measure size oI companies. Some companies, which are large in terms oI Iundamental value or which intend to attract Ioreign capital, might preIer to use Indian accounting standards convergent with IFRS earlier than required under the road map presented by the government. The government should provide that choice. Conclusion The government will come up with a separate road map Ior banking and insurance companies by February 28, 2010. Let us hope that transition in case oI those companies will not be deIerred Iurther. edit] 1apan The Accounting Standards Board oI Japan has agreed to resolve all inconsistencies between the current JP-GAAP and IFRS wholly by 2011. |11|
edit] Pakistan All listed companies must Iollow all issued IAS/IFRS except the Iollowing: IAS 39 and IAS 40: Implementation oI these standards has been held in abeyance by State Bank oI Pakistan Ior Banks and DFIs IFRS-1: EIIective Ior the annual periods beginning on or aIter January 1, 2004. This IFRS is being considered Ior adoption Ior all companies other than banks and DFIs. IFRS-9: Under consideration oI the relevant Committee oI the Institute (ICAP). This IFRS will be eIIective Ior the annual periods beginning on or aIter 1 January 2013. edit] Russia The government oI Russia has been implementing a program to harmonize its national accounting standards with IFRS since 1998. Since then twenty new accounting standards were issued by the Ministry oI Finance oI the Russian Federation aiming to align accounting practices with IFRS. Despite these eIIorts essential diIIerences between national accounting standards and IFRS remain. Since 2004 all commercial banks have been obliged to prepare Iinancial statements in accordance with both national accounting standards and IFRS. Full transition to IFRS is delayed and is expected to take place Irom 2011. edit] Singapore In Singapore the Accounting Standards Committee (ASC) is in charge oI standard setting. Singapore closely models its Financial Reporting Standards (FRS) according to the IFRS, with appropriate changes made to suit the Singapore context. BeIore a standard is enacted, consultations with the IASB are made to ensure consistency oI core principles. |12|
edit] South Africa All companies listed on the Johannesburg Stock Exchange have been required to comply with the requirements oI International Financial Reporting Standards since 1 January 2005. The IFRS Ior SMEs may be applied by 'limited interest companies', as deIined in the South AIrican Corporate Laws Amendment Act oI 2006 (that is, they are not 'widely held'), iI they do not have public accountability (that is, not listed and not a Iinancial institution). Alternatively, the company may choose to apply Iull South AIrican Statements oI GAAP or IFRS. South AIrican Statements oI GAAP are entirely consistent with IFRS, although there may be a delay between issuance oI an IFRS and the equivalent SA Statement oI GAAP (can aIIect voluntary early adoption). edit] Turkey Turkish Accounting Standards Board translated IFRS into Turkish in 2006. Since 2006 Turkish companies listed in Istanbul Stock Exchange are required to prepare IFRS reports. edit] List of IFRS statements with full text link
ALL FULL TEXTS available here at the IASB |4| The Iollowing IFRS statements are currently issued: IFRS 1 First time Adoption oI International Financial Reporting Standards IFRS 2 Share-based Payment IFRS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held Ior Sale and Discontinued Operations IFRS 6 Exploration Ior and Evaluation oI Mineral Resources IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments IFRS 9 Financial Instruments IAS 1: Presentation oI Financial Statements. IAS 2: Inventories IAS 7: Cash Flow Statements IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors IAS 10: Events AIter the Balance Sheet Date IAS 11: Construction Contracts IAS 12: Income Taxes IAS 14: Segment Reporting (superseded by IFRS 8 on 1 January 2008) IAS 16: Property, Plant and Equipment IAS 17: Leases IAS 18: Revenue IAS 19: Employee BeneIits IAS 20: Accounting Ior Government Grants and Disclosure oI Government Assistance IAS 21: The EIIects oI Changes in Foreign Exchange Rates IAS 23: Borrowing Costs IAS 24: Related Party Disclosures IAS 26: Accounting and Reporting by Retirement BeneIit Plans IAS 27: Consolidated Financial Statements IAS 28: Investments in Associates IAS 29: Financial Reporting in HyperinIlationary Economies IAS 31: Interests in Joint Ventures IAS 32: Financial Instruments: Presentation (Financial instruments disclosures are in IFRS 7 Financial Instruments: Disclosures, and no longer in IAS 32) IAS 33: Earnings Per Share IAS 34: Interim Financial Reporting IAS 36: Impairment oI Assets IAS 37: Provisions, Contingent Liabilities and Contingent Assets IAS 38: Intangible Assets IAS 39: Financial Instruments: Recognition and Measurement IAS 40: Investment Property IAS 41: Agriculture edit] List of Interpretations with full text link
ALL FULL TEXTS available here at the IASB |5| PreIace to International Financial Reporting Interpretations (Updated to January 2006 IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities (Updated to January 2006) IFRIC 7 Approach under IAS 29 Financial Reporting in HyperinIlationary Economies (Issued February 2006) IFRIC 8 Scope oI IFRS 2 (Issued February 2006)has been eliminated with Amendments issued to IFRS 2 IFRIC 9 Reassessment oI Embedded Derivatives (Issued April 2006) IFRIC 10 Interim Financial Reporting and Impairment (Issued November 2006) IFRIC 11 IFRS 2-Group and Treasury Share Transactions (Issued November 2006)has been eliminated with Amendments issued to IFRS 2 IFRIC 12 Service Concession Arrangements (Issued November 2006) IFRIC 13 Customer Loyalty Programmes (Issued in June 2007) IFRIC 14 IAS 19 The Limit on a DeIined BeneIit Asset, Minimum Funding Requirements and their Interaction (issued in July 2007) IFRIC 15 Agreements Ior the Construction oI Real Estate (issued in July 2008) IFRIC 16 Hedges oI a Net Investment in a Foreign Operation (issued in July 2008) IFRIC 17 Distributions oI Non-cash Assets (issued in November 2008) IFRIC 18 TransIers oI Assets Irom Customers (issued in January 2009) SIC 7 Introduction oI the Euro (Updated to January 2006) SIC 10 Government Assistance-No SpeciIic Relation to Operating Activities (Updated to January 2006) SIC 12 Consolidation-Special Purpose Entities (Updated to January 2006) SIC 13 Jointly Controlled Entities-Non-Monetary Contributions by Venturers (Updated to January 2006) SIC 15 Operating Leases-Incentives (Updated to January 2006) SIC 21 Income Taxes-Recovery oI Revalued Non-Depreciable Assets (Updated to January 2006) SIC 25 Income Taxes-Changes in the Tax Status oI an Entity or its Shareholders (Updated to January 2006) SIC 27 Evaluating the Substance oI Transactions Involving the Legal Form oI a Lease (Updated to January 2006) SIC 29 Disclosure-Service Concession Arrangements (Updated to January 2006) SIC 31 Revenue-Barter Transactions Involving Advertising Services (Updated to January 2006) SIC 32 Intangible Assets-Web Site Costs (Updated to January 2006) SIC 33 Consolidation and equity method - Potential voting rights and allocation oI ownership interests