Ahmad Daraya university

Under the supervision of the Professor : Amel Nadjemi

The student Saidi Aya submits a research entitled :

What are international accounting standards and their relevance?

2023/2024
 Contents

Introduction

The definition of international accounting standards

Date of inception of IAS

The key standards of IAS

The impact of international accounting standards

The aims of international accounting standards

Importance of international accounting standards

Conclusion
Introduction

In conjunction with increased corporate and investor business, the need to

prepare financial reports and lists for investors to rely on factual information
has increased, and therefore there has been a trend towards the existence of
international standards or cross-border common business language, helping to
drive the global economy. Besides improving the efficiency of international
markets, this has prompted many comparisons between different accounting
systems to ensure the growth of domestic and international companies, and
multinational investments. Now if you have an interest in the accounting,
financial and business sector, or you have business plans or investment business
activities, you should pay more attention to the so-called International
Accounting Standards. In this article, we will learn about the concept and
relevance of International Accounting Standards, as well as the impact of these
standards on financial reporting, as well as the most prominent of these
standards.
1) The definition of international accounting standards

International Accounting Standards can be interpreted as (IAS) is a model or

guideline whereby elements of financial lists associated with circumstances,
events and variables that may affect the global financial position are measured,
and relies on these criteria to reduce the difference between experts' opinions
on certain situations that may affect a business, as well as to measure the
efficiency of such activity. The general definition of IPSAS as a set of accounting
standards developed by the London-based International Accounting Standards
Board (IASB), consisting of 15 members from 9 States, has become the basis for
the preparation of financial statements and statements.

2) Date of inception of IAS

The idea of IAS is not up to date, as the need for IAS has begun since the 1950s,
owing to economic conditions following the Second World War and increased
cross-border capital flows.

Initial efforts and initiatives have focused on reducing differences among

experts on accounting standards prevalent in the financial market standards ",
the 1960s came with calls for common standards, and then the 1970s and 1980s
through the formation of an international standard-setting committee and then
the 1990s through the restructuring of this Committee, and then the 2000s to
develop these principles by agreeing on a set of serious criteria that could be
applied to all capital markets.
3) The key standards of IAS

 Inventory Standard

This criterion is an accurate description of the accounting treatment of

inventories and is intended here as materials and supplies that provide general
services or are used in production operations. inventory held for commercial
trading or sale during the period of business; or during the manufacturing
period, the cost of inventory includes purchase and sale costs, transportation
and customs duties, Besides the transformation of production, in addition to the
costs of employees in public administration, sales and marketing. Inventory is
measured by estimating collectible value or by measuring cost.

 Fixed asset standard

It means assets that may yield economic benefits in the future, such as
production supplies and equipment and the supply of goods and products,
assets used for leasing to others, or assets that can be used in administrative
institutions for more than an accounting period. Fixed assets are measured on a
cost basis such as purchase or import costs, or collection and processing costs.

 Criteria for the impact of changes on foreign exchange rates

This criterion includes the consequences of changing foreign exchange rates

between the date of the operation and the date of settlement, and how foreign
currency transactions are calculated in the financial statements. This criterion
requires a high level of transparency in the disclosure of information by
organizations.
  Stock Profitability Standard

This standard aims to recognize the profitability of ordinary shares to measure

the success of an enterprise over the various accounting periods, and to
compare the organizations' performance in accounting periods.

 Asset erosion standard

This criterion focuses on the procedures to be followed to ensure that fixed

assets are not redeemable from their book value. The institutions here must
conduct a decay test, thereby disclosing fixed asset degradation losses at the
end of each financial period.

 Government Grant Standard

It includes the disclosure of government assistance to standard institutions for

the purpose of achieving economic and commercial benefits. These grants take
different forms, and the institution must disclose the nature of these grants and
their accounting policy.

 Business Integration Standard

It aims to clarify the accounting processes resulting from the clustering of

companies' businesses or the merger of enterprises with each other whether
this merger is vertical, horizontal or mixed.

 Rent Accounting Standard

This standard aims to measure leases of property and tools, and evaluate them
based on their cost, to ensure that both the tenant and the landlord provide
identical information.

 Agriculture Standard

Aims to assess financial data on agricultural activity during the harvest period,
as well as data on the conversion of vital assets into agricultural products.

 Investment Property Standard

They include assets and property held for profit or capital increase, such as
buildings for rent or preserved for future use, measured at cost.
  Standard of events after the reporting period

As a result of some changes, organizations may have to make adjustments to

their disclosed financial statements to reflect events that occurred after the
reporting period.

 Standard for changes in accounting policies

This is the criterion that includes some changes in accounting policy to

retroactively correct certain past errors, or to provide more credible
information.
4) The impact of international accounting standards

IAS focuses on accounting hypotheses and bases. Some Governments have

issued instructions requiring compliance with IPSAS. Normally, any IAS from a
particular date that must be specified in the IAS special statements is applied
and is not applied retroactively. The following are the most prominent findings
of IAS application:

 IAS enables financial information that achieves transparency and efficiency

in financial markets around the world and enhances the ability to build
regulators' financial listings worldwide.
 It helps to improve international investment, as the use of a common
accounting language and standard reduces the cost of capital, and
prepares many financial lists and reports unnecessarily.
 Preparation of reports and financial statements is flexible, as these criteria
can take into account all expected and unexpected circumstances and
variables in the money market, as they are based on applicable general
principles.
 These standards help business owners coordinate presentation on their
financial situation, and prepare financial lists that are completely separate
from the traditional scope of local accounting standards. All financial
reports and lists become recognized in IAS-applying countries, without the
need to prepare financial reports and studies in foreign markets.
 Prevents data misrepresentations and frauds used for the preparation of
financial statements, which helps auditors to verify the authenticity of
data, thereby improving the reliability of financial statements and
statements.
 These standards help measure the ability of the various sections of the
organization to increase profitability and adhere to financial duties.
5) The aims of international accounting standards

Accounting is usually considered to be the business language that clarifies an

enterprise's financial position, any language with rules and foundations that
govern it, and international accounting such as language has standards and
rules governing its work. The following are the main objectives of IAS:

 Highlight the credibility of data for reporting and financial statements, as

failure to comply with such standards can lead to serious consequences.
 Making comparisons between companies and institutions, which allows
knowledge of the company's internal situation and status.
 Apply a set of accounting policies that may include disclosure of different
financial transaction methods.

6) Importance of international accounting standards

Investments and business transactions between enterprises and various

countries have doubled, along with the rise in the value of foreign currencies,
the trading price and exchanges between countries, as well as the emergence of
inflation rates, all of which have served to highlight the importance of the
International Accounting Standards :

 Prepare serious and impartial financial lists away from personal interests
and whims.
 Make decisive decisions and eliminate any differences of views, so that
any decision is based on these criteria.
 Identify appropriate methods for measuring information.
 Provide honest analytical results to investors and users of financial
statements.
Conclusion

As an essential reference for the standardization of global accounting practices,

IPSAS is clearly important in enhancing transparency and reliability in financial
reporting and enhancing confidence among investors and those working with
companies and financial institutions. Thanks to these standards, companies and
institutions can provide accurate financial reports and effectively compare the
financial performance of companies around the world. They also facilitate
international financial integration and reduce the cost and complexity
associated with international financial reporting.
In addition, IPSAS provides a common framework for evaluating companies'
financial performance across national borders, thus promoting fair and effective
competition in global markets. Accordingly, IPSAS adoption is a critical step
towards sustainable development and a transparent and fiscal global economy.
However, IPSAS implementation requires a serious commitment from
companies and institutions to implement IPSAS accurately and continuously.
Continuous cooperation between regulatory authorities and relevant
accountants is also required to ensure the effective and timely application of
standards.
In concluding the research, IPSAS is a vital tool for enhancing transparency and
reliability in financial reporting and enhancing trust among all parties to the
financial relationship, and contributes significantly to global financial stability
and sustainable economic development .