IFRS Implementation – An Introduction
IFRS is perhaps the most important change to financial reporting effected on a global scale. IFRS or International Financial Reporting Standards are standards, interpretations and frameworks adopted by the International Accounting Standards Board (IASB).
IFRS comprises of “a single set of high-quality, global accounting standards that require transparent and comparable information in general-purpose financial statements”.
IFRS is applicable for all corporate entities that are publicly accountable. For entities that publish general purpose financial statements and are not publicly accountable, separate framework has been issued as IFRS for SME’s . SME’s in this context is not based on that size but based entirely on whether they have public accountability or not.
What does IFRS consist of?
IFRS Financial Statements comprises of the following:
- Statement of Financial Position (Balance Sheet)
- Comprehensive Income Statement
- Statement of changes in Equity
- Cash Flow Statement
- Explanatory Notes including accounting policies
What are the underlying assumptions of IFRS statement?
The underlying assumptions are
- The statements (except Cash Flow) are to be prepared under accrual basis and
- On a going concern basis
What are the drivers for IFRS Convergence?
The goal of the IASC (International Accounting Standards Committee) Foundation and the IASB (International Accounting Standards Board) is to develop, in the public interest, a single set of high-quality global accounting standards.
IFRS Applicability:
More than 100 countries have already adopted IFRS. Currently IASB is involved in closing the gaps between US GAAP and IFRS paving way for an early adoption by USA. India has committed for adoption from April 2011 with a list of Phase-1 companies.
