Evolution of International Financial Reporting Standards (IFRS)
Accounting is the systematic measurement and recording of financial information used for decision-making, coordination, or control in an organisation. In broader perspective the financial information has to be more read as “quantitative information" rather than just merely "financial information" as the measurement and use of "non-financial information" has emerged as a hot topic in the field of management accounting.
With more and more companies approaching overseas markets for capital requirement and also the investors focusing on international markets for their investment portfolios the scenario calls in for a uniform set comparatives. Different countries were having their own Accounting standards and guidelines which are often not uniform bringing in inconsistency in comparisons. It is becoming more and more important to bring in uniformity in financial reporting demand that transcend national borders. Financial statements prepared using a common set of accounting standards help investors better understand investment opportunities as opposed to financial statements prepared under differing sets of national accounting standards. Without common standards, global investors incur the time and effort to understand and convert the financial statements so that they can confidently compare opportunities. This process is time-consuming and can be difficult, sometimes causing investors to resort to educated guesses as to content and comparability. Additionally, if investors are presented with financial information that varies substantially depending on which accounting standards are employed, that can cause investors to have doubt about the actual financial results of a company, resulting in a correspondingly adverse effect on investor confidence. IFRS look set to fulfill this global role.. This calls for...