Regulatory framework for financial reporting
Regulatory framework for financial reporting
Introduction
In the next couple of pages the author will firstly discuss the main advantages of the crossroad growing adoption of IFRS, and how does it particularly benefit investors and managers. The author will also be discussing the most significant challenges of the adoption and expansion of the IFRS in the future. Further more the author will, suggest how the IASB and its key constituents should face these challenges and overcome them.
IFRS International Regulatory framework for financial reporting
Before we get into discussing the advantages of IFRS let us first begin with a little introduction about what IFRS actually does. Regulatory framework for financial reporting was designed in order to form a sort of common language that businesses and companies accounts are clear and comparable in international environments. This has started as a consequence of expanding of international trades and shareholding. This system has been particularly welcoming by companies that are operating in several countries. This is due to the fact that by adopting the same system companies can easily compare and view their financial statements. The IFRS was fist introduced to the European Union in order to systematize accounting standards. This concept quickly became popular even outside of the European union and was adopted by countries all over the world. Globalization is a great factor why IFRS is being adopted by countries outside the EU, as accounting can be though of as a language form and if all companies report under the same regulatory framework communication between them is much clearer and faster. Between the years of 1970 to 2001 a different account system was used known as International Accounting Standards (IAS). By April first in 2001 a new international Accounting Standard Board was introduced and they have adopted the already existing IAS system and developed the standard as well as renaming it to IFRS.
Introduction
In the next couple of pages the author will firstly discuss the main advantages of the crossroad growing adoption of IFRS, and how does it particularly benefit investors and managers. The author will also be discussing the most significant challenges of the adoption and expansion of the IFRS in the future. Further more the author will, suggest how the IASB and its key constituents should face these challenges and overcome them.
IFRS International Regulatory framework for financial reporting
Before we get into discussing the advantages of IFRS let us first begin with a little introduction about what IFRS actually does. Regulatory framework for financial reporting was designed in order to form a sort of common language that businesses and companies accounts are clear and comparable in international environments. This has started as a consequence of expanding of international trades and shareholding. This system has been particularly welcoming by companies that are operating in several countries. This is due to the fact that by adopting the same system companies can easily compare and view their financial statements. The IFRS was fist introduced to the European Union in order to systematize accounting standards. This concept quickly became popular even outside of the European union and was adopted by countries all over the world. Globalization is a great factor why IFRS is being adopted by countries outside the EU, as accounting can be though of as a language form and if all companies report under the same regulatory framework communication between them is much clearer and faster. Between the years of 1970 to 2001 a different account system was used known as International Accounting Standards (IAS). By April first in 2001 a new international Accounting Standard Board was introduced and they have adopted the already existing IAS system and developed the standard as well as renaming it to IFRS.