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1453377
Financial Reporting & IFRS
Description
Mind Map on Financial Reporting & IFRS, created by Thiffany Martin on 13/10/2014.
Mind Map by
Thiffany Martin
, updated more than 1 year ago
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Created by
Thiffany Martin
almost 10 years ago
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Resource summary
Financial Reporting & IFRS
History & Structure of the IASB
1973 : IASC - Father
Issues IAS
IASC Foundation - independent organisation
Trustees
appoint IASB members
exercise oversight
raise the needed funds
objectives
to bring about convergence of national accounting standards and IAS & IFRS to high quality solutions
to promote the use & rigorous application of the standards
to develop in the public interest a single set of high quality, understandable, & enforceable global accounting standards
that require high quality, transparent & comparable information in F/S & other financial reporting
to help participants in the world's capital markets & other users make economic decisions
IASB - Son
Independent & privately-funded accounting standard setter (London)
Issues IFRS which includes IAS
sole responsibility for setting accounting standards
14 board members - diff. countries - variety of functional backgrounds
members not dominated by any particular constituency / regional interest
technical expertise
to promote the harmonisation of the accounting standards
requirement of the European Commission - listed companies - European Union - prepare the F/S in accordance to IFRS
endorsement of IOSCO on IFRS / IAS
Interpretations
IASB issues
IFRS (13 sets - IFRS 1 to 13)
IAS (29 sets - 12 withdrawn - IAS 1 to 41)
Difference
IASB designated its accounting standards as IFRS
IAS were issued by IASC
After IASB, IFRS includes IAS
SIC & IFRIC (9 SIC & 13 IFRIC sets)
Objective
to resolve & reconcile the accounting differences in each country and place
Current Trends & Future Challenges
Trends
globalization of accounting standards & convergence to IFRS
convergence on terminology to be used
Fair value measurement
more relevant
should reflect market condition at the balance sheet - revalued at each balance sheet
Less accounting choices would be available
Off-balance sheet item must be recognised in the balance sheet
risk approach / oriented disclosures are required
Challenges
Historical accounting differences
corporate failure
Limited experience & time consuming
Further changes in IFRS may occur
does not have mechanism to resolve application dispute, inconsistent application / misapplication issue
If any dispute, no international organization - power to enforce IFRS & assure entities are really in compliance with the IFRS
Fair value accounting was blamed & increasing pressure on IASB & IFRS
Application & Use
general purpose F/S
other financial reporting
comprises information outside the F/S
assists - interpretation - complete set of F/S
improves users' ability - make efficient economic decisions
content perspective
sets out recognition, measurement, presentation, & disclosure requirements dealing with transactions
equal authority
bold
main principles
plain
entity perspective
apply to the general purpose F/S & other financial reporting
all profit-orientated entities
not-for-profit public & government entities may find them appropriate
Authority
achieves its objectives
promoting the use of those standards in general purpose F/S & other financial reporting
developing & publishing IFRS
no authority to require compliance with its accounting standards
where IFRS are the required accounting standards / an entity chooses to comply with IFRS
requirements of all IFRS should be regarded as mandatory
rigorous & open due process
high quality
developed only after giving IASB's constituencies opportunities to make their views known at several points in the standard setting due process
Procedure for developing an IFRS
Set an agenda
Plan a project
Develop & publish a discussion paper
Develop & publish an exposure draft
Develop & publish an IFRS
Procedures after an IFRS is issued
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