AYB200 report Essay

The first benefit of the conversion is comparability. Switching to IFRS would allow people to see various companies from different parts of world on the same plane. As willingness to trade increases, cross-border investment and integration of capital markets are easier with greater market liquidity and lower cost of capital. Investor bases would increase as the financial reports are becoming comparable. With better information, companies would be able to more effectively allocate their capital. Having one standard, however, does not guarantee comparability. With the same standard, practices and enforcement can differ considerably across firms and countries.

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.

IFRS’s are a single set of accounting standards at a global level for all sectors. Accounting standards are trustworthy statements is the reflection of financial statements to be presented to the stakeholders . United kingdom has already adopted IFRS since 2005.I would be discussing on adoption of IFRS by United kingdom for this paper. The United

From Willmore (2015) research, a few studies have shown IFRS convergence is a hot issue within the accounting discipline; many people in the accounting and business join in on this topic. Majority agrees that IFRS is a more principles-based approach opposed to U.S. GAAP, a more rules-based approach. A source even stated American

The U.S is moving toward IFRS (Forgeas, 2008). In the near future, all US company may need to report financial statements under IFRS. This makes the adaptation of IFRS unavoidable. Recently, some large multinational

Wide range of entities will be impacted by the introduction of AASB 15, especially in the industry of construction, manufacturing, telecommunications and real estate (Moore Stephens Australia, 2015). While Deloitte (2016) stated that many companies may face a challenging implementation as AASB could not only impact an organisation’s financial reporting, but also may have changes to existing processes, internal controls and other business elements. For Lend lease, many impacts might be arisen on transaction as it is a construction company. The first one can be concluded that by adopting AASB 15, construction companies like Lend lease can bring revenue forward. An example of AASB 15 may result in revenue being recognised earlier than existing accounting standard is where the construction contract includes an award bonus. AASB 15 will include the bonus from the

The aim of IFRS is to go global, where everyone would use a common set of accounting standards making intercontinental transactions more suave. But the question is will these accounting standards

The SEC has several aspects to consider when it comes to the adoption of IFRS in the United States. First, the SEC should consider the overall costs impact this will have on businesses. It is likely that it would cost billions of dollars in new reporting expenses for U.S corporations to implement IFRS. It would also require accounting firms to vastly change their education requirements. Second, the SEC’s main job is to protect investors from fraud on public exchanges. The commission must determine whether IFRS does a better job of protecting investors from unlawful activity.

In May 2014, IFRS 15 regarding revenue from contract with customers is released by International Accounting Standards Board (IASB) and Financial Accounting Standard Boards (FASB). Since Australian Accounting Strandard Boards (AASB) comply with IFRS, subsuquently, AASB issued AASB 15 replacing AASB 111 and AASB 118.

On February 24, the SEC unanimously agreed to publish a statement of continued support for a single set of high-quality global accounting standards. The SEC acknowledged that IFRS is best positioned to be the global standard. Even without a set conversion timeline from the SEC, IFRS has been affecting

International Financial Reporting Standards (IFRS) are the most used set of accounting principles across the world. IFRS are issued by the International Accounting Standards Board (IASB), an independent, private-sector. Over 12,000 companies in more than 116 countries have adopted IFRS, and more countries are continuing to adopt the standards each year. (IFRS, 2015).

Another challenge convergence faces is the fact that under IFRS, there are little industry-specific standards, which has led many commentators to voice “concerns about how IFRS would impact their particular industry” (AICPA, 2009). Other critics have voiced concerns regarding the uncertainty surrounding funding for the IASB as it’s “largely funded through voluntary contributions from a wide variety of participants across the world’s capital markets. The concern with that model is that it leaves the IASB open to the perception that organizations that provide funding could try to influence the accounting standards” (SIAC, 2012). This observation questions whether there is true independence of the IASB and the integrity of its standard-setting process.

International Financial Reporting Standards (IFRS) are an international set of accounting standards. Early in the 21st century, the Australian Accounting Standards board, with guidance from the Financial Reporting Council (FRC), decided to implement IFRS’s throughout Australia. This decision was made so that Australia could participate and contribute to the development of a distinct set of accounting standards that could be used all around the world.

The transition to the International Financial Reporting Standards (IFRS) has not been the easiest. Some counties have faced challenges. One big challenge is that not all countries have adopted IFRS. India, Japan and the US are top economic countries that have yet to embrace IFRS. If

IFRS addresses practical application issues that any entity is supposed and expected to encounter within the standards. These practical issues provide a comprehensive analysis. For instance, IFRS 1 provides extensive guidelines “…and addresses practical application issues that a first-time adopter of IFRSs could expect to encounter when transitioning to IFRSs”. (KPMG, 2009). The IFRS, being principle-based, generally do not contradict with Generally Accepted