Accounting and Small Business

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 business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

The nature of an organisation determines the different financial statements required to be completed annually. This report will analyse three contrasting types of entities, in addition to the differences in the annual reports produced.

For all size of companies which is included the small and medium enterprises (SME) in given dissimilarity factors such as social, economic and culture, the appropriateness of IFRS with its benefits related the relationship with the implementation costs have to be concerns. For adopting IFRS is an expensive and complicated task for SME because they are not facing the issues of international competitions. It will becomes a burden for company (Chen,

The very first concern relates to the subject of recognizing and measurement requirements compared to the full IFRSs. Moreover, there is criticism about the hierarchies for choosing accounting policies, since its consequence is the disparity of accounting policy choices in different entities (Australian Accounting Standard Board 2010). The other concern is about the training and education costs for both tertiary and profession level. AASB also requires the IFRS for SMEs to include more topics and treatment options in order to meet its stand-alone objective. Several comments about the suitability of IFRS for SMEs for Tier 2 were noted by AASB. For example, favorable accounting policies for Australian companies have been replaced; subsidiaries are forced to adapt to new policies since parents comply with full IFRSs; changing in the requirements of recognition and measurement do not produce any sort of future economies for SMEs in Australia. Therefore, AASB will choose to continue monitor and assess the possibility of adopting IFRS for SMEs in the future, and adopts RDR as an alternative since there are overwhelmingly positive support for it over the IFRS for

According to the research, Accounting standards exist to facilitate the preparation of high-quality and consistent general purpose financial statements to convey the useful information about the general financial condition and results related to reporting entities, such as companies, non-profit corporations and governments. And Australia adopted International Financial Reporting Standards (IFRS) in 2005, as directed by the Financial Reporting Council in its 2002 directive to the AASB. The Australian Accounting Standards Board has published AASB 15 Revenue from Contracts and Customers, the Australian equivalent of its international namesake, IFRS 15. And the purpose of the new Standards is to provide (except in relation to some specific exceptions, such as lease contracts and insurance contracts) a single source of accounting requirements for all contracts with customers, thereby replacing all current accounting pronouncements on revenue.

In accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the similarities, and differences between the GASB and FASB.

In Australia the current reporting entity concept to abide by for reporting entities is the Corporations Act 2001. It and AASB101 determine who must compile financial reports (SAC 1), what financial statements companies must produce (AASB101.10), when (AASB101.36) & details of the company 's financial records (AASB101.112-124) are to be reported to its shareholders & customers. There is no one way to display this information, an entity can choose from up to 3 different costing methods, and 2 different analysis methods (AASB101.102). (ICAA Financial Reporting Handbook 2014)

The IFRS 8 is an international accounting standard, which requires entity, adopt management method when report operating segments’ financial performance to made the segmental information closer to the internal report of the entity. The IASB has substituted IFRS 8 for IAS 14 and combined the segment report request with the SFAS 131 Disclosure about Segments of an Enterprise and Related information.

The most common user of general purpose financial reporting is present and potential investors, lenders, and creditors. So the objective of financial reporting is to provide relevant financial information that is useful for users in making decision about buying, selling and providing loans or setting loans. The user needs information about resources of the company as well as also wants to know how efficiently management of the company performs their duties to use resources of the entity. The IFRS framework says that financial reports cannot provide all the information to users that users may need to make decisions. They must need relevant information from other source.

IFRS 8 (‘the standard’) aligns the identification and reporting of operating segments with internal management reporting. Segment reporting under IFRS 8 should highlight the information and measures that management believes are important and are used to make key decisions. It should also provide a better link between the financial statements and the information reported in management commentaries such as the Operating and Financial Review or Management Discussion and Analysis. The standard converges IFRS with US Accounting Standard SFAS 131 ‘Disclosure about Segments of an Enterprise and Related Information’. This publication explains the key requirements of the standard and some practical issues for entities to consider when it is applied for the first time.

Through the analysis of these studies and journal articles, we will examine the different aspects of IFRS, the purpose of IFRS and overall whether it has provided an increase or decrease in accounting qualities within firms’ financial reporting.

Concerned with the complicate situations in financial reporting which leads to conflicts between IFRS and conceptual framework, this easy is going to explore the debate around the purpose and status of IASBs conceptual framework. The first section is about background knowledge. I am going to introduce some context of the conceptual framework and basic conception of conceptual framework: 1 what is IASB 2 what is conceptual framework 3 what is IFRS. These are the basic knowledge which should be introduced before exploring the debate of conceptual work.

Many companies understand that in order to attract people fund in their entities and support them in their long- term operation, information of financial report are one of the most vital requirements for achieving this goal. By referring to the IASB Conceptual Framework of financial reporting in 2010,

“The Objective of the Conceptual framework project is to improve financial reporting by providing a more complete, clear and update set of concepts” (IFRS.org). Although the current framework has been crucial in to the IASB when developing and revising IFRS’s there have been a few problems. There are areas that are uncovered, limited guidance and out of date areas. In July 2013 the IASB issued a discussion paper which is designed to explore potential changes to the IASB’c conceptual framework and the possibility of a revised framework. “The Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements“ (JULY 2013). This discussion document is the first step to a revised