International Financial Reporting Standards

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Recommended: Globalization and global market

Ignacio Pigna
ACG2071 Honors Project
Professor Balmori
04/15/15
Honors Project
International Financial Reporting Standards (IFRS) in the United States is a set of accounting standards developed by a not-for-profit organization called the International Accounting Standards Board in order for the financial information of non-governmental entities to be fair and honest. The standards released by the IFRS apply to companies that issue publicly traded debt or securities, and many other business entities as well. In the European Union the term IFRS refers to standards set to improve international business accounting standards. These standards are usually aimed towards publically traded companies that have business taking place in many different …show more content…

The International Financial Reporting Standards were created because of growing international business and trade, and the rules they develop are essential for companies that do business in several countries. These standards were originally created to help with the accounting across the European Union, but the standards that were developed have become very popular around the world. They have become so popular that the United States will soon adopt the standards placed by the IFRS. Many get confused because the IASB issues standards every year called the IFRS, but these standards are not for global purposes, they are just for the United States. Bothe the FASB and the IFRS have many similar requirements. They both aim for faithful representation of financial standings. They both want the information released to be free of error. They also call for the material being presented to investors and other interested parties to be consistent and understandable. Another key component they both share is the neutrality of the information released; they both want the material to be unbiased in order to avoid …show more content…

When we look at the IFRS standards we see that fair market valuation is available for a larger selection of assets than under U.S. GAAP standards.
IFRS Activity 3:
COMPANY: FIFO less LIFO IFRS NET INCOME CURRENT ASSETS (IFRS NET INCOME COLUMN2)
REPORTED NET INCOME
Exxon $21348 $30143 36% 99%
Ford $865 $4686 3% 100%
Kroger $827 $1173 11% 105%

C) It can be observed that Exxon has the biggest variance between FIFO and LIFO inventory as a percent of current assets. We can observe this occur because Exxon has massive inventories of oil and varying oil products. Also, we see such a big difference between FIFO and LIFO valuation because of the large differences between the current prices of oil and the prices observed throughout

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