International Financial Reporting Standards (IFRS) is a set of accounting standards, developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements. India is one of the over 100 countries that have or are moving towards IFRS (International Financial Reporting standards) convergence with a view to bringing about uniformity in reporting systems globally, enabling businesses, finances and funds to access more opportunities. ICAI has decided to implement IFRS in India. The Ministry of Corporate Affairs has also announced its commitment to convergence to IFRS.

1. www.iactglobal.in
1

2. www.iactglobal.in
2
Part A : International Sources of Authority
 The IASB and the Regulatory Framework
 Need for regulatory framework
 IASB
 Scope & Application of IFRS
 Managing the change
 Progress &
 Benefits
 The Conceptual Framework for Financial Reporting
 List of IAS/IFRS

3. www.iactglobal.in
Regulatory Framework
3
Regulatory framework is the most important element in
ensuring relevant and faithful presented financial
information.
Its Need:
 To meets the needs of shareholders and other users.
 It provides a principal based approach.
 The main objective is to raise the standard financial
reporting and
 To bring global harmonisation of accounting standards.

4. www.iactglobal.in
Global Harmonization
4
Harmonized financial reporting provides:
 Platform for wider investment choice.
Efficient Capital Market
 Lower Cost of Capital
 Enhance Business development

5. www.iactglobal.in
IASB
5
The International Accounting standard board (IASB) is
an independent, privately funded body that develops and
approves IFRS, under the oversight of IFRS Foundation.
 The predecessor body of IASB was IASC (International
Accounting Standards Committee). IASC was founded in 1973
and from its formation it worked with a objective to issue
“basic” Standards, called International Accounting Standards
(IAS).
With the purpose of shaping IASC for the future,IASB
organization was formed in April 2001.
IASB adopted all existed IAS & now superseding them with
the issuance of IFRS. So far 15 IFRS has been issued.

6. www.iactglobal.in
Structure of IFRS Foundation
6

7. www.iactglobal.in
Scope & Application of IFRS
7
Role of Standard Setting Bodies

8. www.iactglobal.in
How a Standard Develops
8
1) Research Programme
2) Standards Programme
3) Review Programme

9. www.iactglobal.in
Managing the change to IFRS
9
IFRS 1 First-time Adoption of International Financial
Reporting Standards, gives guidance to entities applying
IFRS for the first time.
Opening IFRS SoFP
An entity prepare & Present an opening IFRS statement of
financial position at the date of transition to IFRS as a
starting point for IFRS accounting
IAS 1 Presentation of Financial Statements requires the
presentation /comparatives of
 at least 3 statements of financial position (SoFP) and
 two of each other statement (i.e. SoCI, SCIE etc).

10. www.iactglobal.in
Managing the change to IFRS
10
Transition Process
 Accounting Policies
 Derecognition of assets and liabilities
 Recognition of new assets and liabilities
 Reclassification of assets and liabilities
 Measurement.

11. www.iactglobal.in
Progress Towards Global
Harmonisation
11
2001: IFRS Foundation Established
2002 : EU agrees to adopt IFRS from 2005 & IASB and
FASB agree joint programme to improve respective
standards & bring convergence.
2003 : Australia, Hong Kong, New Zealand & South
Africa agree to adopt IFRS from 2005
2004 : IASB and ASBJ (Japan) agree to converge IFRS
and Japanese GAAP (approved in 2009)
2005 : Almost 25 countries switch from national GAAP
to IFRS

12. www.iactglobal.in
Progress Towards Global
Harmonisation
12
2006 : China adopts accounting standards substantially in
line with IFRS, with goal of full convergence.
2007 : In US, SEC permits Non-US companies to report
using IFRS, consults on domestic use.
2008 : Brazil, Canada, Chile, Israel and Korea, Malaysia
and Mexico announce intention to adopt IFRS.
2009 : G20 leaders support work of the IASB, call for
rapid move towards global accounting standards.
2010 onwards : JOURNEY IS GOING ON…..

13. www.iactglobal.in
IFRS & Its Benefits
13
IFRS stands for “International Financial Reporting Standards”.
It is a unique, high quality, easily understandable global
accounting standards. It is also known as “principles based” set
of standards which are easy to understand and apply.
Reporting in IFRS could make it easier to raise capital in
global markets.
This would eliminate costs of restatement into local
standards.
It would make the consolidation process easier.
IFRS are being used increasingly worldwide, so it will make
the appraisal of potential acquisition targets more
straightforward.

14. www.iactglobal.in
Conceptual Framework
14
It is a statement of generally accepted theoretical principles,
which form the frame of reference for financial reporting.
Purpose
 To assist the Board in:
• developing and reviewing IFRSs
• promoting harmonisation
 To assist national standard-setting bodies.
 To assist preparers of financial statements in applying IFRSs.
 To assist auditors in forming an opinion.
 To assist users of financial statements in interpreting
information contained in financial statements.
 To provide interested parties with information about how
IFRSs are formulated.

15. www.iactglobal.in
Conceptual Framework
15
Key Notes
 The Framework is not an IFRS.
 It does not define standards.
 Nothing in it overrides any specific IFRS.
 If a conflict between the Framework and an IFRS arises,
the IFRS prevails.
 It applies to all commercial, industrial and business
reporting entities – public and private.

16. www.iactglobal.in
Conceptual Framework
16
Scope
The Conceptual Framework deals with:
 Objectives of financial statements
 Qualitative characteristics of useful financial information
 Underlying assumption
 Elements of financial statements
 Recognition and measurement of elements of financial
statements
 Concepts of capital and capital maintenance.

17. www.iactglobal.in
Conceptual Framework
17

18. www.iactglobal.in
Conceptual Framework
18
Objective of general purpose financial reporting
To provide information about the reporting entity that is useful
to existing and potential investors, lenders & other creditors in
making decisions about providing resources to the entity.
Qualitative Characteristics
Fundamental qualitative characteristics are
 Relevance (nature & materiality) and
 Faithful representations (complete, neutral & free from error).
It includes substance over form.
Enhancing Qualitative characteristics
It includes Comparability , Verifiability, Timeliness &
Understandability.

19. www.iactglobal.in
Conceptual Framework
19
Underlying Assumption
 Going concern
That the entity will continue in operation for the foreseeable
future. Therefore there is no intention/need to liquidate or
curtail significantly the scale of operations
Elements of financial statements
 Asset , Liability , Equity
 Income and Expenses.

20. www.iactglobal.in
Conceptual Framework
20
Recognition meaning
Incorporating into the SoFP or SoCI an item that:
 Meets the definition of an element; AND
 Satisfies the recognition criteria.
Recognition criteria
 It is probable that any future economic benefits will flow
to the entity; AND
 The item has a cost or value that can be measured with
reliability.

21. www.iactglobal.in
Conceptual Framework
21
Measurement
It is the process of determining the monetary amount at
which the elements of the financial statements are to be
recognised and carried in SoFP & SoCI.
Measurement bases
 Historical Cost
 Current cost
 Realisable (settlement) value
 Present value
 Fair value.

22. www.iactglobal.in
Conceptual Framework
22
Historical Cost
 Assets – the amount paid/fair value given to acquire them
at the time of their acquisition.
 Liabilities - the amount received in exchange for the
obligation, or the amounts expected to be paid to satisfy the
obligation in the normal course of business.
Current cost
Assets – the amount that would have to be paid to acquire
the same or an equivalent asset currently.
Liabilities – the undiscounted amount required to settle the
obligation currently.

23. www.iactglobal.in
Conceptual Framework
23
Realisable (settlement) value
 Assets – the amount currently obtainable by selling the
asset in an orderly disposal.
 Liabilities - at settlement values (i.e. the undiscounted
amounts expected to be paid to satisfy the liabilities).
Present value
Assets – present discounted value of future net cash
inflows that the item is expected to generate.
Liabilities – present discounted value of future net cash
outflows expected to be required to settle the liabilities.

24. www.iactglobal.in
Conceptual Framework
24
Fair Value
 When the framework document was first issued the concept
of fair value was not widely used and so was not incorporated
into the framework .
 However over the past few years the use of fair value in
accounting has become far more widespread.
When the IASB issued new standards that required or
allowed the use of fair value there was no consistency between
each standard as to how fair value should be measured.
In May 2011 the IASB issued IFRS 13 Fair Value
Measurement as the reference point for any asset or liability
that is measured at fair value.

25. www.iactglobal.in
Conceptual Framework
25

26. www.iactglobal.in
List of all IAS & IFRS
26
No. Name Status
IAS 1 Presentation of Financial Statements Exist
IAS 2 Inventories Exist
IAS 3 Consolidated Financial Statements Superseded
IAS 4 Depreciation Accounting Superseded
IAS 5 Information to Be Disclosed in Financial Statements Superseded
IAS 6 Accounting Responses to Changing Prices Superseded
IAS 7 Statement of Cash Flows Exist
IAS 8
Accounting Policies, Changes in Accounting Estimates
and Errors Exist
IAS 9 Accounting for Research and Development Activities Superseded
IAS 10 Events after Reporting Periods Exist

27. www.iactglobal.in
List of all IAS & IFRS
27
No. Name Status
IAS 11 Construction Contracts Superseded
IAS 12 Income Taxes Exist
IAS 13 Presentation of Current Assets and Current Liabilities Superseded
IAS 14 Segment reporting Superseded
IAS 15 Information Reflecting the Effects of Changing Prices N/A
IAS 16 Property, Plant and Equipment Exist
IAS 17 Leases Exist
IAS 18 Revenue Superseded
IAS 19 Employee Benefits Exist
IAS 20
Accounting for Government Grants and Disclosure of
Government Assistance Exist

28. www.iactglobal.in
List of all IAS & IFRS
28
No. Name Status
IAS 21 The Effect of Changes in Foreign Exchange Rates Exist
IAS 22 Business Combinations Superseded
IAS 23 Borrowing Costs Exist
IAS 24 Related Party Disclosure Exist
IAS 25 Accounting for Investments Superseded
IAS 26
Accounting and Reporting by Retirement Benefit
Plans Exist
IAS 27 Consolidated and Separate Financial Statements Exist
IAS 28 Investment in Associates Exist
IAS 29 Financial Reporting in Hyperinflationary Economies Exist
IAS 30
Disclosures in the Financial Statements of Banks and
Similar Financial Institutions Superseded

29. www.iactglobal.in
List of all IAS & IFRS
29
No. Name Status
IAS 31 Interests in Joint Ventures Superseded
IAS 32 Financial Instruments: Presentation Exist
IAS 33 Earnings Per Share Exist
IAS 34 Interim Financial Reporting Exist
IAS 35 Discontinuing Operations Superseded
IAS 36 Impairment of Assets Exist
IAS 37
Provisions, Contingent Liabilities and Contingent
Assets Exist
IAS 38 Intangible Assets Exist
IAS 39
Financial Instruments: Recognition and
Measurement Exist
IAS 40 Investment Property Exist
IAS 41 Agriculture Exist

30. www.iactglobal.in
List of all IAS & IFRS
30
No. Name
IFRS 1
First Time Adoption of International Financial Reporting
Standards
IFRS 2 Share based Payment
IFRS 3 Business Combination
IFRS 4 Insurance Contracts
IFRS 5 Non current assets held for sale and discontinued operations
IFRS 6 Exploration for and Evaluation of Mineral Resources
IFRS 7 Financial Instruments: Disclosure
IFRS 8 Operating Segments
IFRS 9 Financial Instruments

31. www.iactglobal.in
List of all IAS & IFRS
31
No. Name
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interest in Other Entities
IFRS 13 Fair Value Measurement
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from contracts with Customers

32. www.iactglobal.in
32