The International Financial Reporting Standards Essay

The International Financial Reporting Standards Essay

Length: 1302 words (3.7 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

It is a known fact that the differences in culture, language, religion, education, ideology and politics around the world necessitate the variety of accounting rules and standards. However, it is imperative that a single set of standards for the reporting of financial statements should be in place. Admittedly, with the significant growth of the cross-border business and trade, if the companies are equipped with a set of high-quality accounting standards they will not only improve financial reporting across the globe but also will be able to enhance the consistency, comparability, and efficiency of their financial statements. These essential needs gave birth to IFRS.
The International Financial Reporting Standards (IFRSs) are developed by The International Accounting Standards Board (IASB) which was formed in 2001 to replace the International Accounting Standards Committee. IASB is a private sector body that works independently to develop and approve the international standards. IASB operates under IFRS foundation. The IFRS Foundation was formed to “develop a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards (IFRSs) through its standard-setting body, the IASB (FASB, 2002)”. The Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, 2002).
Exposure drafts discuss the standards and rulings that are being contemplated through pending discussion drafts and exposure documents of FASB and IASB. An exposure ...


... middle of paper ...


...easurement of share-based payment transactions and to clarify how to account for certain types of share-based payment transactions.

The amendments will be effective for annual periods beginning on or after 1 January 2018 (IFRS, 2014).
Three main areas are discussed in the exposure draft.
• The effects of vesting conditions on the measurement of a cash-settled share-based payment transaction
• The classification of a share-based payment transaction with net settlement features for withholding tax obligations
• The accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash-settled to equity-settled (IFRS, 2014).
The retrospective application is permitted if all three amendments are elected and meeting other criteria, however the application should not restate the prior periods (EY, 2016).


Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The International Financial Reporting Standards Essay

- It is a known fact that the differences in culture, language, religion, education, ideology and politics around the world necessitate the variety of accounting rules and standards. However, it is imperative that a single set of standards for the reporting of financial statements should be in place. Admittedly, with the significant growth of the cross-border business and trade, if the companies are equipped with a set of high-quality accounting standards they will not only improve financial reporting across the globe but also will be able to enhance the consistency, comparability, and efficiency of their financial statements....   [tags: International Financial Reporting Standards]

Better Essays
1302 words (3.7 pages)

International Financial Reporting Standards ( Ifrs ) Essay

- Shareholders as an external user are relying heavily on financial statements to aid them in making judgment. Information contains in financial statements must be reliable and relevance in order to have a useful accounting information as well as to strengthen the decision-making. The essay will examine several criteria in the financial statements that are needed in improving decision-making for shareholders in the scope of International Financial Reporting Standards (IFRS). Standard-setting process is designed to produce high quality financial reporting that is valuable to the users....   [tags: International Financial Reporting Standards]

Better Essays
1499 words (4.3 pages)

Ifrs And International Financial Reporting Standards Essay

- IFRS stands for International Financial Reporting Standards, which is a set of accounting standards that can be used globally by public companies for financial reporting. The set of standards are governed by the International Accounting Standards Board that is based in London. The purpose of converting the U.S to these standards is to streamline all the companies that are abroad and in the United States as far as financial reporting. This process is supposed to produce cost savings for companies that operate in the U.S....   [tags: International Financial Reporting Standards]

Better Essays
1091 words (3.1 pages)

Financial Reporting And International Accounting Standards Essay

- The IASC Board approved the IASB (International Accounting Standards Board) Framework ( in April, 1989) which was a successor of the IASC Board, and it accepted its Framework in April 2001 (Wells, 2011)[ Wells, M J. C., (2011). Framework-based Approach to Teaching Principle-based Accounting Standards., Accounting Education: an international journal., 20(4), 303-316.]. International standards are developed by IASB which are named International Financial Reporting Standards (IFRS). Although IASB took the place of IASC with its accounting standards, its IAS (International Accounting Standards) is enforced by IASB until now....   [tags: International Financial Reporting Standards]

Better Essays
1729 words (4.9 pages)

Japan Should Adopt The International Financial Reporting Standards Essay

- This report examines the benefits and drawbacks of whether Japan should adopt the International Financial Reporting Standards (IFRS) over its current standards (GAAP). Improvements in information’s quality, long-term cost saving and other motivating factors that IFRS will bring, have been reflected in the benefits aspect. Though this standard undertook numerous benefits for the financial statement permitted by, there are various drawbacks that country must be overcome. These obstacles mostly relate to conversion costs and political issues....   [tags: International Financial Reporting Standards]

Better Essays
1035 words (3 pages)

International Financial Reporting Standards For Comparability Between Financial Statements

- Consider to what extent International Financial Reporting Standards allow for comparability between Financial Statements. Overview Accounting gives companies, investors, regulators and others with a standardized way to explain the financial performance of an entity. Accounting standards present preparers of financial statements with a set of rules that they have to follow when preparing an entity’s accounts, making sure this standardization is across the market (Robert 2008). Many Companies are required to publish their financial statements in accordance with the relevant accounting standards....   [tags: International Financial Reporting Standards]

Better Essays
707 words (2 pages)

Essay on Implementation Of A Single Financial Reporting Standards

- Adoption (as well as Total Convergence) is Unattainable Establishment of a single financial reporting standard with full universal acceptance, or taken even further in the unlikelihood that there is worldwide alignment of all reporting standards, is unattainable on various levels. Due to the prevailing economic, political, and cultural environments, it is unconvincing and irrational for a uniform set of global financial reporting standards. As nations adopt IFRS and continue to operate under their own distinct economies, there is less comparability in the reporting between nations....   [tags: International Financial Reporting Standards]

Better Essays
1850 words (5.3 pages)

International Financial Reporting Standards : International Accounting Standards

- 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....   [tags: Balance sheet]

Better Essays
1394 words (4 pages)

International Financial Reporting Standards Essay

- The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation....   [tags: Accounting]

Better Essays
1068 words (3.1 pages)

Essay about International Financial Reporting Standards

- The globalization of the world’s capital markets has created an increasing need for comparable, detailed and transparent system of financial reporting making it imperative to establish one set of high quality global accounting standards (Gornick-Tomaszewski, S., & Showerman, S.2010). Currently, there are two sets of accounting standards that are generally accepted for international financial reporting- The U.S. GAAP ( Generally Accepted accounting Principles ) which have been developed by the Financial Accounting Standards Board (FASB) and the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board(ISAB) (Kieso, D.E., Weygandt, J.J., Warfiel...   [tags: globalization, accounting, IFRS]

Better Essays
1296 words (3.7 pages)