Financial Reporting & IFRS

Thiffany Martin
Mind Map by Thiffany Martin, updated more than 1 year ago
Thiffany Martin
Created by Thiffany Martin over 5 years ago
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Mind Map on Financial Reporting & IFRS, created by Thiffany Martin on 10/13/2014.

Resource summary

Financial Reporting & IFRS
1 History & Structure of the IASB
1.1 1973 : IASC - Father
1.1.1 Issues IAS
1.1.2 IASC Foundation - independent organisation
1.1.2.1 Trustees
1.1.2.1.1 appoint IASB members
1.1.2.1.2 exercise oversight
1.1.2.1.3 raise the needed funds
1.1.2.2 objectives
1.1.2.2.1 to bring about convergence of national accounting standards and IAS & IFRS to high quality solutions
1.1.2.2.2 to promote the use & rigorous application of the standards
1.1.2.2.3 to develop in the public interest a single set of high quality, understandable, & enforceable global accounting standards
1.1.2.2.3.1 that require high quality, transparent & comparable information in F/S & other financial reporting
1.1.2.2.3.1.1 to help participants in the world's capital markets & other users make economic decisions
1.1.2.3 IASB - Son
1.1.2.3.1 Independent & privately-funded accounting standard setter (London)
1.1.2.3.2 Issues IFRS which includes IAS
1.1.2.3.3 sole responsibility for setting accounting standards
1.1.2.3.3.1 14 board members - diff. countries - variety of functional backgrounds
1.1.2.3.3.2 members not dominated by any particular constituency / regional interest
1.1.2.3.3.3 technical expertise
1.1.3 to promote the harmonisation of the accounting standards
1.1.3.1 requirement of the European Commission - listed companies - European Union - prepare the F/S in accordance to IFRS
1.1.3.2 endorsement of IOSCO on IFRS / IAS
2 Interpretations
2.1 IASB issues
2.1.1 IFRS (13 sets - IFRS 1 to 13)
2.1.1.1
2.1.2 IAS (29 sets - 12 withdrawn - IAS 1 to 41)
2.1.2.1 Difference
2.1.2.1.1 IASB designated its accounting standards as IFRS
2.1.2.1.1.1 IAS were issued by IASC
2.1.2.1.1.1.1 After IASB, IFRS includes IAS
2.1.3 SIC & IFRIC (9 SIC & 13 IFRIC sets)
3 Objective
3.1 to resolve & reconcile the accounting differences in each country and place
4 Current Trends & Future Challenges
4.1 Trends
4.1.1 globalization of accounting standards & convergence to IFRS
4.1.1.1 convergence on terminology to be used
4.1.2 Fair value measurement
4.1.2.1 more relevant
4.1.2.2 should reflect market condition at the balance sheet - revalued at each balance sheet
4.1.3 Less accounting choices would be available
4.1.4 Off-balance sheet item must be recognised in the balance sheet
4.1.5 risk approach / oriented disclosures are required
4.2 Challenges
4.2.1 Historical accounting differences
4.2.2 corporate failure
4.2.3 Limited experience & time consuming
4.2.3.1 Further changes in IFRS may occur
4.2.4 does not have mechanism to resolve application dispute, inconsistent application / misapplication issue
4.2.5 If any dispute, no international organization - power to enforce IFRS & assure entities are really in compliance with the IFRS
4.2.6 Fair value accounting was blamed & increasing pressure on IASB & IFRS
5 Application & Use
5.1 general purpose F/S
5.2 other financial reporting
5.2.1 comprises information outside the F/S
5.2.1.1 assists - interpretation - complete set of F/S
5.2.1.2 improves users' ability - make efficient economic decisions
5.3 content perspective
5.3.1 sets out recognition, measurement, presentation, & disclosure requirements dealing with transactions
5.3.2 equal authority
5.3.2.1 bold
5.3.2.1.1 main principles
5.3.2.2 plain
5.4 entity perspective
5.4.1 apply to the general purpose F/S & other financial reporting
5.4.1.1 all profit-orientated entities
5.4.1.1.1 not-for-profit public & government entities may find them appropriate
6 Authority
6.1 achieves its objectives
6.1.1 promoting the use of those standards in general purpose F/S & other financial reporting
6.1.2 developing & publishing IFRS
6.2 no authority to require compliance with its accounting standards
6.2.1 where IFRS are the required accounting standards / an entity chooses to comply with IFRS
6.2.1.1 requirements of all IFRS should be regarded as mandatory
6.3 rigorous & open due process
6.3.1 high quality
6.3.2 developed only after giving IASB's constituencies opportunities to make their views known at several points in the standard setting due process
6.4 Procedure for developing an IFRS
6.4.1 Set an agenda
6.4.1.1 Plan a project
6.4.1.1.1 Develop & publish a discussion paper
6.4.1.1.1.1 Develop & publish an exposure draft
6.4.1.1.1.1.1 Develop & publish an IFRS
6.4.1.1.1.1.1.1 Procedures after an IFRS is issued
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