The International Financial Reporting Standard (IFRS). Corporate Reporting Theory and Practice
Seminar paper from the year 2008 in the subject Business economics - Accounting and Taxes, grade: 1,0, University of the West of England, Bristol (Bristol Business School), course: Corporate Reporting Theory and Practice, language: English, abstract: In this report the International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs) is presented. It identifies that this new standard is required due to mainly smaller, non-listed companies prevailing. These entities currently use diverse national accounting standards and thus are not comparable. However, because of SMEs’ differing activities and stakeholders, existing IFRSs would not be appropriate so new standards are needed. The IFRSs for SMEs are based on initial, full IFRSs but were reduced, simplified and adjusted to reduce the reporting burden that many small companies would suffer. All companies addressed are not publicly accountable, provide general purpose statements and approximately contain 50 employees. Which firms in detail will apply to these new standards is finalised by national jurisdictions. Nonetheless, there can be found some disadvantages. E.g. immense simplifications can result in insufficiently explained standards that can hardly be employed adequately. Furthermore, four accounting events are revealed: goodwill impairment, cost method for associates, finance leases and research and development expenditures. All these show up differences compared to full IFRSs. The preparation of financial reports is facilitated and user interests are taken into consideration. However, alternatives can be suggested that perhaps are more appropriate for SMEs. Finally, it is concluded that the IFRS for SMEs are well developed including advantageous adjustments that try to satisfy SMEs’ as well as their reports users’ needs. However, it becomes apparent that some revisions could be necessary to consequently truthfully allow the vast amount of smaller companies become globally comparable.
What people are saying - Write a review
We haven't found any reviews in the usual places.
Accessed 20 December Accountancy Magazine accounting policies appropriate asset benefits burden for SMEs capitalised Chartered Accountants Journal Corporate Reporting Theory cost method creditors Development Expenditures Elliott&Elliott 2006 Ernst and Young existing IFRSs Exposure Draft fair value less finance leases Financial Reporting Standard financial statements Foundation Publications Department four accounting full IFRS full IFRSs GAAP goodwill impairment higher-quality statements IASB IASB's IASC Foundation Publications IFRSs for SMEs International Accounting Standards International Financial Reporting International Reporting KNOWLEDGE HAS VALUE KPMG lease object leases and research leases as operating listed companies Medium-sized Entities Method for Associated minimum lease payments national jurisdictions non-listed companies Nonetheless Pacter present value Proposal for SMEs provide general purpose Publications Department online Reasons Why IFRSs Recognition and Measurement reporting burden Reporting Standard IFRS research and development Sealy-Fisher simplified and adjusted smaller companies SMEs are assigned SMEs are Needed Standard for SMEs users of SMEs value less costs Whittington 2007 www.GRIN.com