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What are IFRS?
International Financial Reporting Standards (IFRS) are a fixed set of international accounting standards maintaining how certain kinds of transactions and other proceedings should be stated in financial statements. IFRS are handed out by the International Accounting Standards Board (IASB), and they lay down how exactly accountants must maintain and report their accounts. The objective of IFRS upon its establishment was to have a common accounting language in order, for businesses and companies from across the globe.
The objective of IFRS is to see to it that there exists the required amount of stability and transparency in the financial world. Such an action safeguards the position of many individual investors and large corporates as it allows them to make more informed decisions about whether to invest in a company or not. IFRS are the standards in most parts of the world including the European Union, many countries of Asia and South America, but not however in the US. In the US, the Securities and Exchange Commission (SEC) is still in the process of reviewing whether to accept these standards or not. These standards have benefitted those countries the most, that do a lot of investing and international trade. There has been a strong wave throughout the world, in favor of applying the IFRS standards in all countries as they would allow information to flow more freely and would cut costs on individual investigations and other alternatives.
In those countries that have completely adopted the IFRS, both investors and organizations are benefiting this system as investors now have more faith in these companies and their practices. Moreover, the cost of each individual investment tends to be lower in these countries. Thus, those countries that are actively involved in the foreign business are more likely to benefit from these standards.
People most of the times get confused whether IFRS is the same as IAS or International Accounting Standards. Well, they’re not the same. The IAS was the older accounting standards that were being used from the years 1973 to 2000. Moreover, the International Accounting Standards Board (IASB) got replaced with International Accounting Standards Committee (IASC) in the year 2001.
Standard IFRS Rules
IFRS engulfs a large number of accounting activities. There are several portions of business practice for which the IFRS have set compulsory rules.
- Statement of Financial Position: also popularly known as The Balance Sheet. IFRS have a huge influence on the manner in which the constituents of a balance sheet are recorded.
- Statement of Comprehensive Income: There can be two parts of this statement viz. the Profit and Loss statement and the statement of Income from other sources including machinery and property.
- Statement of Changes in Equity: This is also known as a statement of retained earnings. It is maintained to ascertain the company’s change in profit or earnings for a given financial period.
- Statement of Cash Flow: The purpose of this statement is to summarize the financial transactions of the company for a said period, segregating the cash flows into Operations, Investing and Financial activities.
- In addition to preparing these statements, a company is also required to provide a summary of its accounting policies. The complete report is viewed side by side along with the previous reports to ascertain the changes in profit and loss. The parent organization must maintain separate account reports for each and every one of its subsidiaries.
IFRS Training Description
The IFRS Framework
The Conceptual Framework defines the objective and the ideas for generalised financial reporting. It is a hands-on tool that:
- helps the Board to create IFRS Standards that are constructed on consistent patterns;
- helps constructors to create consistent accounting rules if no IFRS Standard is applicable to a particular operation or event, or if a Standard permits a choice of accounting policy
- helps the other stakeholders to comprehend and infer the Standards.
The aim of the Conceptual Framework is to develop financial reporting through a more clear, comprehensive and latest set of conceptions.
Why is the IASB revising the IFRS Framework?
The IASB’s current IFRS Framework was created by its ancestor body called the International Accounting Standards Committee, in the year 1989. Although the existing Conceptual Framework has aided the IASB in developing and reviewing the International Financial Reporting Standards:
- some significant aspects are not touched upon;
- the direction in certain areas is vague; and
- certain aspects of the prevailing Conceptual Frameworks are outdated.
In 2011, IASB conducted a public session on its program. The IASB recognized that the Framework was a top priority project. Therefore, the IASB resumed the IFRS Framework project from 2012 onwards.
Who will be affected by the revised IFRS Framework?
The Conceptual Framework does not override pre-existing Standards and is not a sole Standard. Thus, the planned changes to the Framework do not leave any immediate effect on the financial statements of a majority of accounting entities. Still, a few entities may get affected by the alterations directly if they decide to make use of the Conceptual Framework to construct their accounting policies once no IFRS Standard precisely applies to specific business dealing.
The IFRS Framework is likely to guide the Board whenever it makes its Standards in the future, and it will have an effect on financial statements indirectly as organizations implement revised Standards on the basis of the revised ideological Framework.
What about the future of this project?
The Board will contemplate on the remarks they have got on the Exposure Draft whilst developing the revised ideological Framework. In the Board meeting to be held in March, the staff is expected to do an analysis of the remark letters received. In the next meeting, the Board would likely be deciding on the project course. Moreover, the Board wishes to conclude the revised ideological Framework in the first quarter of 2017.
IFRS in India
Adaptation is actually more than just a methodical accounting issue. The congregated IFRS standards in India known as “Ind AS” are likely to affect a company’s daily procedures and can even impact the stated profitability of the organization too. Adaptation brings a sole opportunity to fully review the financial reporting.
On 2nd Jan 2015, the Press Information Bureau under the aegis of the Government of India issued a letter charting the various stages in which Indian Accounting Standards congregated with the IFRS. The Ind AS, is suggested to be employed in India for all companies except the Banking, Insurance,and NBFCs.
The employability of the Ind AS is done on the basis of its listing status and the net worth. Ind AS would first apply to those with a net worth >= 500 crore INR from 1st April 2016. Those listed companies and other firms that have a net worth >= 250 crore INR would follow from 1 April 2017. And, from April 2015 the organizations impacted during the first phase now have to consider the details of the thirty-nine new Ind AS presently notified. Moreover, Ind AS is proposed to be applicable to subsidiaries, associates, joint ventures and other holding companies of entities covered under the roadmap.
Finance Minister Arun Jaitley, while declaring Ind AS implementation in his Budget 2014 speech, said that different standards for the calculation of tax would be advised separately.
Pre-requisites to IFRS Training
IFRS course online offered by our organization is a completely online academic course comprising of study materials, videos and tutorials, demos, online chats, and FAQ’s all available on our homepage for student reference. Here are some basic pre-requisites for a student interested in our IFRS Course:-
- A PC/Laptop with a high-speed Internet Connection and a modern web browser such as Chrome as the entire course is available through online only.
- A Chartered Accountant (CA) or ICWA or other similar degrees (not mandatory).
- Understanding of/well-versed in the English language as all course materials are in the language only.
- IFRS Course Basic/Advanced level training/diploma in Ind AS (preferable).
- Completion of a basic educational qualification/graduate degree such as BA/B.Com/BBA.
- Motivation to learn invaluable knowledge on International Accounting Standards and their employability in India.
The IFRS course is ideal for students/professionals/employees/CA’s working in medium-high level organizations and want to master the topics on IFRS course for career growth and realizing organizational demands.
Target Audience for the IFRS Course Training
IFRS Course is an online course designed and developed by our highly trained and experienced staff especially for those students and professionals who are looking to make a successful career into Chartered Accountancy, Cost & Works Accountancy etc. All relevant information, analysis, and data provided in our online IFRS course is verified and updated as on each day and is significantly useful for those aspiring CA’s, CS’s ICWA’s and other professionals into the accounting sphere. This IFRS course is also very helpful for these people:
- Management Students – Those pursuing MBA/PGDM/ Ph.D. in Finance or Financial management.
- Entrepreneurs – People into their own business or aspiring to begin their own venture soon.
- Students – Those aspirants of Management and Accountancy courses from reputed top-end institutions of the country.
- Professionals – People working as a CA, ICWA, CS, CFA or any such similar rank in any low or high-level organization where periodic accounts related to business are maintained.
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