How International Financial Reporting Standards Affect The Quality Of Canadian Accounting Information

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How would International Financial Reporting Standards affect the quality of Canadian accounting information?

INTRODUCTION
Globalization has a great impact on today’s economy. The differences of accounting regulations and practices in various countries have become a noteworthy obstacle to globalization and economic development. International Financial Reporting Standards (IFRS) mitigates global business barriers. In order to adapt to the increasingly global business environment, public companies in Canada will move to IFRS by 2011. This movement will have a significant influence on Canadian business such as capital markets, financial statement preparers, the accounting profession, and even accounting students. Investors are eager to
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On the other hand, it may bring disadvantages to the management since decreasing reliability may make income statement more volatile.

1. COMPARABILITY
1.1 Definition of comparability
According to Canadian GAAP, the definition of comparability is “Financial information measured and reported in a similar manner among different companies. Comparability allows analysts to identify real economic similarities and differences among companies, because those differences and similarities are not obscured by changes in accounting methods or disclosure practices.”
In September 2007, the IASB issued a revised IAS 1 “Presentation of Financial Statements”, in which the definition of comparability was expanded to include consistency with regard of the definition of Canadian GAAP. The definition of comparability in IAS 1 is “Users need to be able to identify differences between the accounting policies for like transactions and other events used by the same entity from period to period and by different entities.” In this paper, we focus on the real economic similarities and differences among companies with regard to comparability.
1.2 The implementation of fair value
IAS16 requires property, plant and equipment to be reported at fair market value, and that estimates of useful life, residual value, and the method of depreciation be reviewed every annual report period instead of periodically under CICA Handbook Section 3061. Under IAS16, users can compare the…