Australia 's Local Government Ifrs Adoption

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Summary The journal article named “The effect of IFRS Adoption on the financial reporting of local government entities” By Kamran Ahmed and Manzurul Alam aims at finding the changes of key accounting components surplus, equity and asset while changing accounting policy from Australian Accounting Standards (AAS) to International Financial Reporting System (IFRS).Introduction of International Financial Reporting System (IFRS) is thought to be a paradigm shifting event in financial reporting system. Australia is one of the first countries to adopt IFRS for the local government. It was a great challenge taken by Australia to adopt IFRS before USA and EU. In 2004 Australia adopted IFRS to their accounting policy. Afterwards, through the…show more content…
According to Deegan one of the reason of concern was leading substantial changes in numerous existing Australian standards and small changes in others reporting requirements due to adoption of IFRS. Ahmed and Alam revealed that from modifying report presentation formats to costs and benefits of profit seeking companies IFRS adaptation impacts significantly. They focused on the listed firms accounting policy after adoption of IFRS and found noticeable changes in results reconciliations prepared under AAS and IFRS. They also studies over decision making process of local government. For larger councils IFRS standards and argued for smaller councils as they though it would be a lot of changes for them to cope with. The authors did empirical study to examine the effect of adoption IFRS in local government entities. The results shows as a result of changing accounting policy from AASB to IFRS there are changes in equity and accounting surplus (loss). They used the annual reports of 117 Australian local government identified by adoption of IFRS the key components of stated in the reconciliation notes that impacts the variance between AASB and IFRS equity and surplus. Their Study also provided consistent result on the effect of adoption of IFRS by private sectors in Australia. Finally, this paper contributes significantly towards the study of IFRS adoption by local government and believes it is a positive move by Australian local government and for
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