International Financial Reporting Standards
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International Financial Reporting Standards (IFRS), often known by the older name of International Accounting Standards (IAS) are a set of accounting standards. They are issued by the International Accounting Standards Board (IASB).
IASs were issued between 1973 and 2001 by Board of the International Accounting Standards Committee (IASC). In April 2001 the IASB adopted all IASs and continued the development, calling new standards IFRSs [1] (http://www.iasb.org/standards/index.asp).
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Adaptation and convergence
IFRS is used in many countries in the world, including Hong Kong and Russia, certain European countries, and recently Australia.
European Union
IFRS was given a boost in 2002, when the European Commission issued a regulation that all listed companies in Europe must adopt IFRS by 2005 for their consolidated accounts (as opposed to the firm's individual accounts). Many member countries within the European Union have made the accounting regulation more restrictive by requiring private companies to comply with IFRS.
United States
The accounting standard in United States has been US Generally Accepted Accounting Principles created by the US Financial Accounting Standards Board. In late 2002, IASB and US FASB issued a joint statement that they will work toward the eventual convergence of two standards. Securities and Exchange Commission is in the process of analyzing differences between IFRS and US GAAP.
Hong Kong
In Hong Kong, HK GAAP is more restrictive than IFRS due to regulatory laws. HK GAAP only deviates from IFRS in minor instances. Therefore, many companies complying with HK GAAP are already IFRS compliant. HK GAAP is moving towards full convergence with IFRS in 2005.
People's Republic of China
In People's Republic of China, the standard used for accounting is PRC GAAP, which is required by law. The accounting requirements for publicly-traded companies in China differ based on the type of company:
- A-share companies are companies trade in Renminbi and inaccessible to foreigners.
- B-share companies are companies trade in a foreign currency and accessible to foreigners.
Because foreign investors have access to B-share companies, all B-share companies are required to file also in IFRS. This requirement is also extended to A-share financial companies.
Australia
The Australian Accounting standards, previous to 1 January 2005, were based around accounting standards developed by the Australian Accounting Standards Board (AASB). As a result of pressure towards international harmonisation, the AASB had been working towards a convergence between the Australian Standards and the IFRS. From 1 January 2005, the Australian equivalent of IFRS have been fully implemented as AASB 101 - 141. It is a requirement that all reporting entities adopt the standards as they have replaced the previous Australian generally accepted accounting principles. Due to the accounting standards operating halfway through the year, the requirements can be summarised as follows:
- Year ended 30 June 2004 - Prepare under pre IFRS standards and state in notes the expected effect of the adoption of IFRS
- Year ended 30 June 2005 - Prepare under pre IFRS standards and prepare a reconcilliation to IFRS standards
- Year ended 30 June 2005 - Prepare under Australian Equivalents to IFRS standards
Russia
Government of Russia implements a program to harmonize its national accounting standards with IFRS since 1998. As of 2004, only financial institutions are required to prepare IFRS reports.
Details
IFRSs are considered a "principles-based" set of standards, in that they establish broad rules rather than dictating specific treatments. As of 2002 a number of IFRSs offer the preparer choices of treatments; the IASB's Improvements Project is seeking to reduce these choices.
International accounting standards currently in use are as follows:
- IFRS 1 First-time Adoption of International Financial Reporting Standards
- IFRS 2 Share-based Payment
- IFRS 3 Business Combinations
- IFRS 4 Insurance Contracts
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- IAS 1: Presentation of Financial Statements
- IAS 2: Inventories
- IAS 7: Cash Flow Statements
- IAS 8: Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting practices
- IAS 10: Events After the Balance Sheet Date
- IAS 11: Construction Contracts
- IAS 12: Income Taxes
- IAS 14: Segment Reporting
- IAS 15: Information Reflecting the Effects of Changing Prices
- IAS 16: Property, Plant and Equipment
- IAS 17: Leases
- IAS 18: Revenue
- IAS 19: Employee Benefits
- IAS 20: Accounting for Government Grants and Disclosure of Government Assistance
- IAS 21: The Effects of Changes in Foreign Exchange Rates
- IAS 22: Business Combinations
- IAS 23: Borrowing Costs
- IAS 24: Related Party Disclosures
- IAS 26: Accounting and Reporting by Retirement Benefit Plans
- IAS 27: Consolidated Financial Statements
- IAS 28: Investments in Associates
- IAS 29: Financial Reporting in Hyperinflationary Economies
- IAS 30: Disclosures in the Financial Statements of Banks and Similar Financial Institutions
- IAS 31: Financial Reporting of Interests in Joint Ventures
- IAS 32: Financial Instruments: Disclosure and Presentation
- IAS 33: Earnings per Share
- IAS 34: Interim Financial Reporting
- IAS 35: Discontinuing Operations
- IAS 36: Impairment of Assets
- IAS 37: Provisions, Contingent Liabilities and Contingent Assets
- IAS 38: Intangible Assets
- IAS 39: Financial Instruments: Recognition and Measurement
- IAS 40: Investment Property
- IAS 41: Agriculture
External Links
- List of current standards and links to standards' summaries (http://www.iasb.org/standards/summaries.asp)cs:Mezinárodní účetní standardy
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