1. What is IFRS ?
IFRS stands for international financial reporting Standards.
As indicated within the title, these standards are aimed at a global practice.
Ultimately, the goal is to achieve a single set of high-quality, common accounting standards used
arounds the word.
These standards are the result of a convergence of international viewpoints.
These standards are for publicly accountable entities.
• Small and medium – sized entities (SMEs) That do not have public accountability may use a
simplified version of IFRS known as IFRS for SMEs
• IFRS for SMEs has recently been accepted for non – SFC registrants by the AICPA as
acceptable alternative reporting standard to US GAAP, however it is not yet common
practice.
2. Advantages of IFRS regulations
• To remove the cross border takeovers and acquisitions by investors.
• Enhances corporate governance.
• True and fair view of their co’s transaction
• IFRS balance sheet is closer economic
• Reduce that risk for new or small investors while trading professional
investors cannot take advantage at is simple to understand financial
statement.
• It helps new or small investors, as reporting standards are simple and make
easy to understand, it put new or small investors in a same position with
professional investors.
• Informative: IFRS tends to be more understandable for investors as they
can understand the financial statements without the necessity of other
resources.
3. How to apply IFRS regulations
1. Understand current or emerging audit issues
- Obtain intelligence on identify new , current, or emerging audit issues
- Determine whether to advance issues to research agenda
2. Research projects
- Research potential issue, taking into account the problem and possible solutions
- Determine whether to advance issue to stand-setting agenda
3. Standard- setting projects
- Develop proposed standard or amendments (rule text) & proposing release
- Resolve policy consideration and refine the solution
- adopt final standard and submit to the SEC for final approval
7. Advantages of Ratings
• It was would create a single set of accounting standards around the world.
• It would reduce the time, effort, and expense of preparing multiple reports.
• It would not be a costly transition in the united states.
• It would make it easier to monitor and control subsidiaries from foreign countries.
• It would offer more flexibility in the accounting practices.
• It would create a higher return on equity.
• It would be helpful to newer investors and smaller investments.
