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Block 2, Session 7 - Fundamentals
of international financial reporting…
Block 2, Session 7 - Fundamentals
of international financial reporting
What?
Overview of how accounting regulation has evolved in various countries before it turns to address the fundamentals of international financial reporting for multinational companies and the need for international financial reporting standards.
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Over the past decade there has been a big focus on designing common reporting standards for businesses so that company accounts are understandable and comparable across international boundaries
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IFRS Standards
Our mission is to develop International Financial Reporting Standards (IFRS Standards) that bring transparency, accountability and efficiency to financial markets around the world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.
Vision
Developed by International Accounting Standards Board (IASB) - independent, private sector, not-for-profit org, committed to developing a single set of high quality global accounting standards
Convergence not substitute for adoption but needs to remain voluntary decision by legislative and regulatory authorities of individual jurisdictions
What are the standards?
A globally recognised set of standards for the preparation of financial statements by business entities - prescribe:
- items that should be recognised as assets, liabilities, income and expense
- how to measure those items
- how to present them in set of financial statements
- related disclosures
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Why adopt standards?
Today, the world’s financial markets are borderless. To assess the risks and returns of their various investment opportunities, investors and lenders need financial information that is relevant, reliable and comparable across borders.
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A comprehensive review of nearly 100 academic studies of the benefits of IFRS Standards concluded that most of the studies ‘provide evidence that IFRS Standards have improved efficiency of capital market operations and promoted cross-border investment’ (Tarca, 2012).
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