IFRS – International Financial Reporting Standard
Now a day many business started to flourish globally so adaptation of IFRS is necessary. IFRS strengthens the accountability and reduce information gap in every sector of a business.
Major requisite in financial recording in maintaining standards of International Financial Reporting Standards. An important recent development is the extent to which IFRS is affected by politics. The credit crunch, the problems in the banking sector and the attempts of politicians to resolve these questions have resulted in pressure on standard setters to amend their standards, primarily those on financial instruments. This pressure is unlikely to disappear, at least in the short term. The IASB is working hard to respond to this; we can therefore expect a continuous stream of changes to the standards in the next few months and years.
Applicability of IFRS
The IASB has the authority to set IFRS and to approve interpretations of those standards. IFRSs are intended to be applied by profit-orientated entities. Financial decisions are made underlying these entities’ financial statements, which give information about performance, position and cash flow. These users include shareholders, creditors, employees and the general public. A complete set of financial statements includes a:
- Balance sheet.
- Statement of comprehensive income.
- Cash flow statement.
- Statement of changes in equity.
- A description of accounting policies.
- Notes to the financial statements.
Accounting practices under IFRS are set out in the IASB’s ‘Framework for the preparation and presentation of financial statements’.