Adoption of Ifrs in Australia - Essay
International Financial Reporting Standards (IFRS) are an international set of accounting standards. Early in the 21st century, the Australian Accounting Standards board, with guidance from the Financial Reporting Council (FRC), decided to implement IFRS’s throughout Australia. This decision was made so that Australia could participate and contribute to the development of a distinct set of accounting standards that could be used all around the world.
This report will explore the process of setting standards in Australia, the effects it can have on interest groups, and the way in which the introduction of IFRS would change the way Australian accountants report their financial position.
The setting of accounting standards is a political process as it involves many different levels of government. It is also political in the way in which the outcomes of these standards can affect different stakeholders.
Adoption of IFRS in Australia
Under paragraphs (1) (a) and (d) of s. 227(1), (the functions of the AASB), we see two of the AASB’s main functions – • “To make accounting standards under section 334 of the Corporations Act for the purposes of the corporations legislation; and • To participate in and contribute to the development of a single set of accounting standards for world-wide use.” Picker et al. 2011, p8
It was the latter of these two points which was the deciding factor for the future of Australian accounting standards. Investors from around the world were craving a single set of accounting standards, making it easy to study the financial reports of companies where they wish to invest their money, from all over the world. As well as this, the information in these reports should be relevant, reliable, and understandable.
There were 3 main phases that took place during the implementation process of IFRS in Australia. Firstly, in 2002, The Financial Reporting Council (FRC) followed the rest of the western world by directing the Australian
This report will explore the process of setting standards in Australia, the effects it can have on interest groups, and the way in which the introduction of IFRS would change the way Australian accountants report their financial position.
The setting of accounting standards is a political process as it involves many different levels of government. It is also political in the way in which the outcomes of these standards can affect different stakeholders.
Adoption of IFRS in Australia
Under paragraphs (1) (a) and (d) of s. 227(1), (the functions of the AASB), we see two of the AASB’s main functions – • “To make accounting standards under section 334 of the Corporations Act for the purposes of the corporations legislation; and • To participate in and contribute to the development of a single set of accounting standards for world-wide use.” Picker et al. 2011, p8
It was the latter of these two points which was the deciding factor for the future of Australian accounting standards. Investors from around the world were craving a single set of accounting standards, making it easy to study the financial reports of companies where they wish to invest their money, from all over the world. As well as this, the information in these reports should be relevant, reliable, and understandable.
There were 3 main phases that took place during the implementation process of IFRS in Australia. Firstly, in 2002, The Financial Reporting Council (FRC) followed the rest of the western world by directing the Australian