Adoption of Ifrs in Australia - Essay

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.

UK’s IFRSs are designed to make it easier to compare the performance of organizations in different countries, rather than each country maintaining its own GAAP, which makes such comparisons difficult. All listed EU companies have been required to use IFRSs since 2005. The adoption of IFRSs by the private sector is expected to have various benefits for both companies and investors; including (1) UK’s IFRSs will remove the need for companies with foreign subsidiaries to translate the accounts for consolidation with the parent company accounts. Also (2) it will be easier for investors to make informed decisions about the performance of companies in different countries because of the increased transparency and a better understanding of financial statements.

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

The IFRS is basically a set of accounting rules which are issued by the IASB based in London, UK. These accounting standards have originated from its predecessor IASC defining the term IAS, which occurred in the 70’s. it was only after 2000’s that the IASB took a strong hold under the label IFRS claiming to be a lot more independent even though pertaining to its predecessor, efficiently staffed and better funded. Caffermen and zeff (2006) discuss about the gradual spread of accounting has made a considerable progress over time, and with the adoption of IFRS worldwide, accounting procedures could be smoothened.

The Financial Reporting Council (FRC) is the key responsible for overseeing the effectiveness of the financial reporting framework. The members of the AASB is appointed by Financial Reporting Council (FRC) (Howieson and Langfield, 2003). FRC can issue broad strategic directions to the AASB, but FRC’s ability is limited by the Australian Securities and Investments Commission Act 2001. Three aspects, which are the codes and standards committee, the executive committee and the conduct committee, support the FRC board. There are some main objectives. For example, accounting standards may

The first Tier 1 is not for SMEs, since it requires the companies have public accountability. The Tier 2 requirements and disclosures are familiar to IFRS for SMEs, but it cannot be directly compare (Australian Accounting Standard Board 2010). These two Tiers adopted the definition of “public accountability” which is based in the IFRS for SMEs. Even though Tier 2 uses the (RDR) rather than the IFRS for SMEs, RDR is still based on the available requirements and accounting policy options to identify recognition and measurement disclosures. Besides, RDR applies the two basic principles under IFRS for SMEs for determining disclosures, which are “user need” and “cost benefit”, to reduce the required disclosures if there are differences between RDR and IFRS for SMEs in the options of measurement accounting policy and

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 this article, the policy change introduced by ASIC (Australia securities and investment commission) stating about three new accounting standards were discussed. These accounting standards were introduced to simplify the account recording process, and to accurately present the relevant information to the clients. The statement presenting for the company are quite important, and the management has to do it in accordance with the set out standards, this assists in overpowering the business challenges and in controlling the operational works. The changes were introduced in the AASB 9 and AASB 15 statements. The other changes were introduced in the AASB 16 for leases.

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.

IFRS and GAAP are two separate sets of accounting used in different countries. ISAB created IFRS and they are hoping to create a set of universal accepted accounting principles for a better comparability between companies of different countries. IFRS is principal base while US GAAP is rules based. There are advantages and disadvantages to transition to IFRS from GAAP, and by comparing US GAAP and IFRS we noticed a lot of the same standards and concepts, but also some major differences.

IFRS or International Financial Reporting Standards is a set of accounting standards developed by an independent, not-for-profit organization called the International Accounting Standards Board (IASB). It is also the common accounting standard used by over 110 countries around the world.

One of the key functions of the Financial Reporting Council (FRC) is to provide broad oversight of the processes for setting accounting standards in Australia. Specifically, the FRC is responsible for determining the broad strategic direction for the setting of standards to be followed by the Australian Accounting Standards Board (AASB).

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

In mainly everything, sports, class rooms, or work places you have a set of rules to go by. In the accounting world, you must also follow a set of rules and standards. The Generally Accepted Accounting Principles (GAAP) or the International Financial Reporting Standards (IFRS). Most countries around the world use IFRS while the United States uses GAAP. International Financial Reporting Standards and Generally Accepted Accounting Principles do things differently. Each country’s government sets which principles the accountants will use. There are also organizations that have been formed to help with all the confusion between countries. The organizations are called Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). FASB is the organization that has been designed by the US government to establish GAAP in the United States. IASB is the international organization developing and promoting accounting standards to be used throughout the world.

"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.)