A research paper based on the following:
a) Examine the concept of international financial reporting standards (IFRS), selecting five studies in this field.
b) Examine and analyze the types of accounting standards followed in developed markets, selecting one nations as case example (except UAE)
Evaluation wil be based on:
1) Application of theory
2) Examining the concepts of International Financial Reporting Standards (IFRS) with review collections
3) Analysis of the case example selected from a nation
International Financial Reporting Standards (IFRS) refers to the rules set by the International Accounting Standards Board (IASB) that aim to guide accountants globally. The regulations direct the maintaining of accounting books that are reliable, understandable, relevant, and comparable depending on the user both internally and externally (Betz, 2014). IFRS provides an international framework that guides the financial statements preparation and disclosure by public companies (Cai, Rahman & Courtenay, 2011). The rules were initially developed in 1973 in the European Union to harmonize accounting that was later adopted by the IASB as the international standards. This paper examines the concepts of IFRS and gives an analysis of a case example.
The purpose of IFRS is to allow for the use of one global reporting language of accounts. The basic concepts of IFRS are meant to advance the application of principles in accounting operations rather than rules. The going concern that represents the future viability of a business is one of the significant IFRS concepts. In this case, financial statements are based on going concern of the business unless it plans to cease trading or liquidate. Another concept is offsetting that IFRS forbids; the practice is only allowable in particular cases such as the deferred tax assets or tax liabilities net presentation. The third IFRS concept is the Accrual Accounting in which the recording of expenses takes place when it is incurred, and recognition of revenue is done at the time it is earned. All financial statements should thus be prepared using the accrual system (Gebhardt, Mora & Wagenhofer, 2014). Fourthly, the materiality concept that dictates that any trivial information should be disregarded and the critical matters must be disclosed. Betz (2014) argues that to prevent fraudulent accounting the materiality principle is crucial. Finally, the concept of IFRS compliance and fair presentation outlines that companies should accurately represent the impacts of accounting events, transactions, or conditions. The process should be done according to the criteria and definitions of liabilities, assets, expenses, and income.
Globally, there are different accounting standard types apart from the IFRS that countries have implemented to guide their accounting practices. Some of these include International Accounting Standards (IAS) and Generally Acceptable Accounting Principle (GAAP) of the United States. The GAAP refers to the guidelines and accounting principles such as full disclosure, matching and cost principle that are established by the Financial Accounting Standards Board (FASB)….