Let's learn more about IFRS......
IFRS stands for International Financial Reporting Standards. IFRS are standards and interpretations adopted by the International Accounting Standards Board. We use U.S. GAAP (Generally Accepted Accounting Principle) for financial reporting purposes in U.S.
Q. What is IFRS?
A. IFRS is a set of accounting standards are becoming the global standards for the preparation of public company financial statements. IFRS is developed by the International Accounting Standards Board (IASB). The IASB is an independent accounting standards body, based in London.
Q. How well-known is the adoption of IFRS around the world?
A. It is being accepted by many countries.
- More than 12,000 companies in 100 nations
- Canada and India expected to adopt by 2011
Q. What are the advantages of converting to IFRS?
A. IFRS provides a platform for companies from different countries to get recognized in foreign markets
- Business can present its financial statements on the same basis as its foreign competitors, making comparisons easier
- Companies may benefit if they wish to raise capital abroad
Q. What is the difference between U.S. GAAP and IFRS?
A. There are significant differences between U.S. GAAP and IFRS.
- IFRS provides much less overall details
- IFRS fits into one book, about two inches thick and paperbacks of pronouncements, plus the paperback version of the FASB Emerging Issues Task Force consensuses, measure about nine inches thick, and that does’t include all the U.S. authoritative accounting literature.
3 comments:
Nice, I like all the basic information that you have provided on this post. It makes it little bit easier for the non-business major to understand the IFRS concept. I have heard that the IFRS conversion will take place in USA by 2014. And countries like India, Canada will adopt this IFRS by 2010 or 2011. I have little bit of background knowledge on this topic, not whole lot but I have come across this topic so many times. I like the idea that IFRS will provide the platform for the companies from all over the world to compare their F/S.
IFRS is a pretty hot topic these days in the accounting profession. Just thinking about it gives me the jitters since all our lives we've been learning GAAP and now we have to start learning another way to record accounting information. On the other hand, the positive aspect of this particular move would be extremely beneficial worldwide as financial statements of different country's would be compared on one particular standard. I have to agree with Vaishali when she says that it will be implemented in the U.S by 2014 since that is what a partner mentioned to me once.
Zain Haroon
I had not heard of the IFRS until I read your post. I like that you break it down into a language that even people without a background in business and accounting can understand. I do not plan to become an accountant but I will at least know what is being referred to when it is talked about on the news.
~Emilie
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