A Strategic Initiative On Ifrs Standards

Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.

As the responsibilities of the global harmonization of accounting standards IFRS and GAAP transfer to IASB, FASB’s influence is waning. Advantages of the convergence include high quality financial reporting, which lowers cost of capital for investors and the cost of borrowing for companies. However, there are disadvantages to be noted, such as the costs of introducing IFRS to current and potential accountants and the risk of reducing the uniformity of financial reports due to the lax rulings of IFRS, which promotes earnings management amongst companies. Although arguments regarding the convergence remain prevalent, the completion of IFRS and GAAP is inevitable. Come year 2015, accountants, investors, and companies alike will discover whether or not the pros outweighed the cons; or vice versa.

Christopher S. Armstrong University of Pennsylvania Mary E. Barth Alan D. Jagolinzer Stanford University Edward J. Riedl Harvard University

As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

In 2001, The International Accounting Standards Board (IASB) was established to develop the International Financial Reporting Standard (IFRS). ). The first IFRS was issued in 2003 and European Union (EU) members committed for requesting all listing company to apply the IFRS in their jurisdictions and will effective on year 2005 (Brussels, 2000).

Within the accounting profession, there have been challenges to develop a set of standards that are generally accepted and universally practiced. Thus far, the main debate in setting accounting standards is “Whose rules should we play by, and what should they be?” While the answer is unclear, users of financial statements and reporting must find methods that has an universal objective, that allows “Grapes for Grapes” comparisons that clearly, fairly, and completely prepares a company financial statements. For years GAAP has been the common set of standards and procedures for the U.S, the core for establishing a principle of reporting but now IFRS an international friendly financial reporting system has become popular for its use globally.

The purpose of this publication is to assist you in understanding the significant differences between International Financial Reporting Standards (IFRSs) and U.S. Generally Accepted Accounting Principles (U.S. GAAP). This publication does not discuss every possible difference; rather, it is a summary of those differences that we have encountered most frequently in practice, resulting from either a difference in emphasis or specific

International Financial Reporting Standards ("IFRS"), often known the original International Accounting Standards ("IAS"), are a set of accounting standards. They are issued by the International Accounting Standards Board ("IASB"), an independent, international organization supported by the professional accountancy bodies. The objective is to achieve uniformity and

Due to the global integration of business and finance throughout the world, approximately 113 countries have adopted or are working on convergence with IFRS. This paper is a look at the history and an examination of where IFRS stands internationally and with the United States. For several decades the industrialized world has been working toward an international set of accounting standards. Since IFRS has become the de facto international accounting language, it is logical that it will be accepted as that standard in the near future.

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). 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) was enforced by IASB and available into practice until now. The conceptual framework is helpful when it is used to develop the setting of International accounting standards. First of all, the definition of conceptual framework provided by Melville (2014, p. 17)[ Melville, A. (2014). International Financial Reporting.(4th ed.). Edinburgh Gate:

"International Financial Reporting Standards (IFRS)" are an arrangement of international accounting norms expressing how specific sorts of exchanges and different occasions ought to be accounted for in money related explanations. "IFRS" are issued by the "International Accounting Standards Board", and they indicate precisely how "accountant" must keep up and report their records. "IFRS" were built up keeping in mind the end goal to have a typical "international language", so business and records can be comprehended from "organization to organization and nation to nation". (www.iasplus.com, n.d.)

What is the International Accounting Standards Board? This paper will give a brief overview on the history of the International Accounting Standards, starting with the role of the IASC Foundation, the structure of the IASB and the number of accounting standards currently published. Next, it will explain the steps in creating an international accounting standard in accordance with due process and it will show the mailing address and phone number. Lastly, there will be a summary of two most recent accounting standards issued by the IASB.

IASB aims to develop in the public interest by setting a high quality accounting standards which are understandable and enforceable worldwide. The accounting standard is transparent and comparable information in the financial statements. IASB also operate to work actively with the national standard setters to bring union of national accounting standards and International Financial Reporting Standards (IFRS). These aims are set based on the consideration on providing important, reliable information which is easily accessible by the users of the IAS and to look for future development in the quality of the standards to restrain resources. In the consideration process, the staffs of the IASB are asked to identify, review and raise issues that might warrant the IASB’s attention. (IFRS, 2014, Online)

The Framework is also of value to auditors, and the users of financial statements, and more generally help interested parties to understand the IASB’s approach to the formulation of an accounting standard. The content of the Framework can be summarised as follows: • Identifying the objective of financial statements • The reporting entity (to be issued) • Identifying the parties that use financial statements • The qualitative characteristics that make financial statements useful • The remaining text of the old Framework dealing with elements of financial statements: assets, liabilities equity income and expenses and

Understanding the foundation to activities embraced by the International Accounting Standards boards and other standard setting bodies to execute the reception of a uniform arrangement of accounting standards for around the world know as IFRS.