IFRS: Not Disaster But Embarrassment

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IFRS: Not Disaster But Embarrassment Moving from adoption to harmonization of Australian Accounting Standards with International Financial Reporting Standards, Australian companies have suffered embarrassment and bemusement in the process of understanding and implementing the new standards. Problems arise in understanding the over-complicated relationships between IFRS, A-IFRS(Australian equivalents to IFRS) and original AASB standards. The distinction between them is not that much significant, but they do have some key differences that are essential to specific transactions and accounting operations. There is not too much trouble with the recognition of the differences between IFRS and AASB. The answer can be found in the textbook , "the only substantive difference between AASB and the corresponding IFRSs is the deletion of one of more alternatives permitted in the IFRSs, or expanding a standard to deal with matters not covered or excluded by IFRSs." The inconsistency of IFRS and A-IFRS is even tricky as saying "the devil is in the detail". The details of a demonstration can be seen in the contrast lists on the page3-5, which were found and copied down on the internet. IFRS adoption affects many areas of financial reporting. The immediate and ongoing implications are not uniform across companies, but depend on such factors as the nature of business activities, balance sheets and capital structures. For some companies, the implications will be less significant, representing mainly a change in the presentation their financial statements. For others, however, the implications will be more substantive. They may involve changes to the amount and composition of reported financial performance and financial position, to the scope for future capital management, the ability of reporting systems to capture required information and changes to operational and risk management practices. The key issues arising from the adoption of IFRS and their prudential implications are outlined below.

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