Ifrs Advantages and Disadvantages

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UNIVERSITY AMERICAN COLLEGE SKOPJE
To be completed by students (typewritten)
COURSE NUMBER| |
COURSE TITLE| Financial Accounting|
SEMESTER| V| SESSION| |
ASSIGNMENT NUMBER| 1| SUBMISSION DATE DUE| |
ASSIGNMENT TITLE| IFRS: Advantages and disadvantages|
INSTRUCTOR’S NAME| |
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* fill in the slot in the covered area if blind second marking is requiredOther comments: STUDENT NAME(s)| Elena Donevska|

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I declare that I have developed and written the enclosed Written work completely by myself, and have not used sources or means without declaration in the text. Any thoughts from others or literal quotations are clearly marked. The Written work was not used in the same or in a similar version to achieve an academic grading or is being published elsewhere. STUDENT REG. NUMBER(s)|

1666|

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Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 2.Theory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1. Advantages of IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4 2.2.Disadvantages of IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ….5 3.Conclusion and/or recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Intorduction:
The swift development of global financial markets demands harmonization of accounting standards and approaches around the world. In 1999 the Europeian Commission presented its financial services action plan, the implementation of which should contribute to the unification of integrated market for financial services in the EU by 2005. In the areas of financial reporting the action plan proposed that all listed companies report under the same accounting framework (Interdisciplinary journal of contemporary research in business, April 2011, Vol.2 No12). International Financial Reporting Standards (IFRS) promises transparent, comparable and consistent financial information to guide investors in making optimal investment decisions (Jacob & Madu, 2004). IFRS are standards and interpretations adopted by the International Accounting Standards Board (IASB). IFRS were adopted in 2001 by the European Union and all stock exchange listed companies were required to use them for reporting purposes after the start of fiscal year 2005 (Soderstorm & Sun, 2007, p. 675). This paper will consider the advantages and disadvantages of IFRS.

Theory:
Advantages of IFRS
There are several advantages that have been presented in public forums, scholarly articles, news accounts, and other places where discussion of public issues are conducted. A discussion of some of the major advantages follow: IFRS promise more accurate, comprehensive and timely financial statement (International Accounting Policy forum, 2006); this means that all accounting information must be relevant, reliable, comparable, and consistent. For information to be relevant, it needs to be significant enough to influence business decisions. The information should help confirm or correct users’...
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