Part One

International Financial Reporting Standards (IFRS)

TIPS FOR READERS

One of the most noteworthy business reporting developments in the history of accounting is the drafting, distribution and usage of International Financial Reporting Standards. This significant initiative, as the naming suggests, has standardised the principles of financial reporting. As a direct result, there is greater integrity in the use of business reports that, in turn, has a positive impact on subsequent decision making.

In addition, the application of IFRS has facilitated reliable comparative analysis between reporting entities within the same industry or geographical location. Of course, on that basis, dependable comparisons can also be conducted across national borders, through the availability of IFRS translations, to enable usage internationally.

It is noteworthy that these Standards are historically grown, which has led to the inclusion and mix-up of objects/items and valuation.

Summary

The first section presents an introduction to, and objectives of, International Financial Reporting Standards. The second section poses the question: how important are IFRS to business? In responding, the text addresses IFRS and legal objectives. The convergence of IFRS and US GAAP is also a topic of conversation, as is reconciliation with respect to US GAAP. Thereafter, a wider ambit is brought in by way of the International Organization of Securities Commissions (IOSCO). This section concludes with the role of regulators and the related enforcement of standards.

The third section looks into the governance and accountability of the IFRS Foundation, particularly its history, structure and finance. The associated monitoring board and trustees of the IFRS Foundation are presented, along with IASB members and the related due process, in addition to the IFRS ­Advisory Council. This sets a solid base upon which the next section rests.

The fourth section expands upon the framework, preface, standards and interpretations of IFRS. The IFRS are summarised, as are the International Accounting Standards (IAS). The treatment of these Standards leads easily into the more recent, and so-called, IFRS for Small and Medium Sized Enterprises and the section concludes with interpretations to those Standards which are a part of the authoritative literature pertaining to IFRS.

The fifth section addressees the IFRS Practice Statement Management Commentary, followed by future plans in the sixth section, and new presentation formats, as well as model financial statements in the seventh section. The eighth section lists the contents of the IFRS Red Book, and the ninth section introduces a glossary of IFRS-related terminology. The tenth section introduces the IFRS book index.

Target audience

The overall concept map shown in the introduction indicates the necessary breadth and depth of elements in this book which play a fundamental part in supporting current and expected thoughts of a new reporting paradigm. Accordingly, we can see that the various sections of this book are likely to be of particular significance to some people more than to others.

Readers who are expected to have an affinity with, and interest in, Part I of this book include:

• accounting practitioners
• developers of business reporting
• deliverers of business reporting
• standard setters
• auditors
• finance professionals
• academics
• students.