The Implementation of IFRS

as a Guide to Overcome Challenges

in International Accounting
 The condition of economic and
business activities nowadays
• Multinational companies: international
operation, subsidiaries in many countries
• Investors seeking investment opportunities
across the world

Need financial statements

Challenges in International Accounting

Different accounting methods

• Different and FR presentation, because:
currencies
• Different & Different accounting standards,
regulations,
etc. And other factors:
• sources of finance
• the existing legal system
• the link between accounting
and taxation
• cultural differences
 Different currencies, regulations, etc.

&
Different accounting methods and FR presentation

More challenge and risk in decision-making

process

Solution:
International accounting standards
 The development of
International Accounting Standards

Important event:
Creation of IASC (1973) and IFAC (1977)

IASC: IAS (1973)  IASB: IFRS (2001)

Harmonization  Convergence
 Characteristics of IFRS

Principal-based  no specific format

Fair value accounting  more transparent

Dynamic  follows the change

More disclosures  quantitatively &

qualitatively
 • transparency
• comparability
Benefits of IFRS • accountability
• efficiency
 The Implementation IFRS
• Supported by :
The G20
major international organizations
many governments
business associations
worldwide accountancy profession

• Required by some international funding

organizations and international capital market
Fully adopted:
• almost the majority of Latin America and Canada
• all of the countries in Europe
• South Korea, Malaysia, Australia, and New
Zealand

Partial adoption:
US, Indonesia

Indonesia adopted IFRS since 2012 (PSAK-IFRS)

IFRS has important role as a guide in
overcoming problems and challenges
that emerge in international
accounting

So, how to fulfill it?

• Supports from governments and accounting
regulatory bodies
• For accountants: hone their knowledge and
practice their professional judgment