IFRS WHAT IS IFRS?
International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.
REQUIREMENTS OF IFRS
IFRS financial statements consist of:
a Statement of Financial Position
a Statement of comprehensive income or two separate statements comprising an Income Statement and separately a Statement of comprehensive income
a Statement of Changes in Equity (SOCE)
notes, including a summary of the significant accounting policies
Comparative information is required for the prior reporting period.
An entity preparing IFRS accounts for the first time must apply IFRS in full for the current and comparative period although there are transitional exemptions.
SAS
IFRS
Balance Sheet
Statement of Financial Position
Profit & Loss Account
Statement of Comprehensive Income (One Statement)
or
Income Statement (separate) and Statement of Comprehensive Income (Two Statements)
‘Other Comprehensive Income’ section of new Comprehensive Income Statement. ‘Other Comprehensive Income’ for short.
Statement of Cash flows
Statement of Cash flows
Recognized in the profit and loss
Recognized in profit or loss
(Note or not and)
‘On the face of’
‘in’
‘Balance sheet date’
‘end of reporting period’
BENEFITS TO USERS AND PREPARERS OF FINANCIAL STATEMENTS
By adopting IFRS, a business can present its financial statements on a single set of high quality, global accounting standards.
Our local standards are partly out of date and are not sufficiently comprehensive to form a basis for preparation of high quality financial statements.
IFRS adoption will result in high quality transparent and comparable financial statements that are based on modern accounting principles and concepts that are being applied on global market.
Companies may also benefit by using IFRS if they wish to raise capital abroad.
CONCLUSION ON IFRS
- IFRS as a tool for cross-border reporting is here to stay and the future is quite positive.
-
Our firm is IFRS compliant.
-
Nigeria cannot be left behind.
-
The benefits of an IFRS conversion far outweigh the costs.
-
IFRS adoption is more than just conformity with the rest of the world.
-
In the not too distant future we are likely to see:
-
Suitability of IFRS in emerging economies.
-
Displacement of US GAAP
-
Criticism of fair value accounting
