IFRS text notes - International Financial Reporting...

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International Financial Reporting Standards (IFRS) Notes IFRS are set by the International Accounting Standards Board (IASB) in response to the “global economy” o Over 15,000 non-U.S. listed companies use IFRS and another 12,000 are expected by 2012 o Many foreign based subsidiaries of U.S. multinationals Prepare IFRS statements Convergence is taking place between U.S. Financial Accounting Standards Board (FASB) and IASB to produce identical or nearly identical reporting standards SEC pushing for convergence o 11/07 SEC voted to allow foreign registrants in U.S. to use IFRS. They no longer have to reconcile differences between reports using IFRS and US GAAP. Impacts about 10% of all publicly listed companies in US o 08/08 approved and released 12/08 a roadmap that may lead to mandated use of IFRS by US companies Select large companies can voluntarily use IFRS in 2009-2011 and if certain milestones are met others will follow in stages depending on size 2014, 2015, 2016 IFRS is allowed in US for private companies Background and Context (Section I) International Accounting Standards (IAS) stem from establishment of International Accounting Standards Committee (IASC) in 1973. Members were Australia, Canada, France, Germany, Japan, Mexico, Netherlands, UK, Ireland, and US o Objectives To formulate and publish in the public interest standards to be observed in the presentation of financial statements and to promote worldwide acceptance and observance To work generally for the improvement and harmonization of regulation, accounting standards and procedures relating to the presentation of financial statements o IASC issued about 25 standards but were criticized for allowing too many alternative treatments intended to satisfy the many variations of accounting practices o They then moved to establish “core” standards that would allow fewer alternatives FASB expressed interest in 1991 on global standard settings o G4+1 is formed (US, UK, Canada, Australia) and called for IASC to be made up of an independent body o Lead to formation of IASB in 2001 which is an independent standard setter which does not represent any particular country and is not a part of any other international body such as IFAC o Members of IASB work full time and give up any affiliations to other organizations o Goal is to provide standards in a common “language” International Accounting Standards Committee Foundation (IASCF) are a not-for profit private sector organization consisting of geographically and professional diverse groups (22 members) that appoint IASB members International Financial Reporting Interpretation Committee (IFRIC) issues interpretations when divergent accounting practices exist for a specific transaction
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Standards Interpretation Committee (SIC) consisting of professionals, academics, regulators, auditors, etc. advises IFRS on broad issues including IASB agenda Process of IFRS o IASB set agenda of possible issues
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IFRS text notes - International Financial Reporting...

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