CHAPTER 1 Standard-Setting Organization

FINANCIAL ACCOUNTING AND What do the numbers mean? How is it going?

REPORTING STANDARDS Financial Reporting Challenges

What do the numbers mean? Fair Consequences

Revolution in International Financial Reporting
What do the numbers mean? Can you do that?
The age of free trade and interdependence of
national economies is now with us. For Global Accounting Insights
globalization to be efficient, companies are
recognizing the need to have one set of financial
reporting standards.

A single set of rules, called International Glossary:

Financial Reporting Standards (IFRS) is now
Free trade – a trade policy between nations that
being used by over 149 jurisdictions. (a global
does not restrict imports or exports.
framework for how public companies prepares and
disclose their financial statements.) IASB – is an independent, private-sector body
(prev. known as International Accounting
Why the need for IFRS?
Standards Committee), based in London. It is
 The global financial crisis before still committed to develop and approve a single set of
continuous up to this day. This is why the global accounting standards which require
G20 supported the work of the IASB transparent and comparable information in general
(International Accounting Standards purpose of financial statements. Hans Hoogervorst,
Board) towards global accounting. ( Michael chairman. (FASB in US).
Prada, chairman of IFRS Foundation)
G20 – an informal gathering of many of the world’s
 The transition to IFRS was not just about
largest economies. It is the premier global forum
accounting, but about the economics of a
for discussing economic issues.
shrinking world. Large multi-national
companies realize the benefits of switching
to a single set of standards; streamlined IT,
better communications with outside parties,
etc.
 Having to use complex hodgepodge of
financial information can act as a barrier to
forming and allocating capital efficiently.
 The current IFRS adoption across the world
proves its practical approach; open,
accessible, responsive, etc.

Global Markets

Objective of Financial Reporting

What do the numbers mean? Do not forget.

Allysa Capuno BSA 1-3 | Digest Page 1 of

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Intermediate Accounting: IFRS Ed. by Kieso, Weygandt, Warfield