INTERNATIONAL FINANCIAL REPORTING STANDARDS

International Financial Reporting Standards

International Financial Reporting Standards

Introduction

International Financial Reporting Standards is the combination of accounting standard. It states that how transactions and other accounting events should be reported in the financial statement. It is declared by the International Accounting Standards Board. International Financial Reporting Standards (IFRS) aspires to bring the entire nations in the world under a similar set of global accounting standards that presents consistency, transparency, and compatibility in financial reporting system. According to a fact, financial regulators in several countries have generated high demand for IFRS compliant financial statement. The International Financial Reporting Standard (IFRS) for Small and Medium size corporations published as an introductory plan by the IASB in 2007. This system introduced and designed for companies that have no public accountability. If shares or debts listed and floated in the public exchange or financial institution company only then there would be Public Accountability. The IFRS for SME (IFSME) have capabilities to apply in the large range of private organizations.

In 113 countries, more than 12,000 companies have implemented IFRS in some degree, and many other countries are enduring to implement the standards each year with the expectation of increased comparability of financial statement. There are many reasons why companies are choosing to migrate towards adopting IFRS before they become mandatory. One of the most fundamental reasons is due to globalization, as most countries have already made the switch over to IFRS. If companies in the US switched over to IFRS it would make transactions and deals with companies who operate under IFRS much easier. It would also give companies and stockholders in other countries a better economic indicator as to how companies here in the US are doing. Another advantage with IFRS is clarity and productivity. Under IFRS, business makers use their own professional judgment as to how to handle a particular transaction. This will lead to less time spent trying to follow all the rules/complications that are coupled with rules-based accounting. It will also allow prepares of financial information to keep statement in a simplistic and acceptable forms for investors and other companies interested in companies financial statements (IASB, 2011a).The switch over to IFRS may be a difficult one, but in the end, it will provide more understandable financial statements and will lead to true economic status. It would also make dealing with international companies much smoother (IASB, 2011a). In the next section, we will examine the current status of the accounting profession's rule making bodies, accounting organizations, accounting and business firms and other business entities and business world's position on the requirement of financial reporting using IFRS.Discussion & Analysis

FASB and IASB have committed to improving and converging IFRSs and US GAAP. It is consistent with the sturdy support for the aim of a singular set of high quality global standards newly uttered by all the Leader of the Group of twenty nations. Their work and efforts will achieve similar set of high quality standard with the independent standard setting process. FASB and IASB are working with US GAAP, and IFRS to achieve their major aim and goal for enhancing global comparability by eradicating dissimilarities. They want to enhance the common standards that will help to improve financial reporting in USA and other parts of the world. These efforts will continue international ...