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Definition of 'International Financial Reporting Standards

- IFRS'

A set of international accounting standards stating how

particular types of transactions and other events should be

reported in financial statements. IFRS are issued by the

International Accounting Standards Board.

IFRS are sometimes confused with InternationalAccounting Standards (IAS), which are the older

standards that IFRS replaced. (IAS were issued from 1973

to 2000.)

Investopedia explains 'International Financial ReportingStandards - IFRS'

The goal with IFRS is to make international comparisons as easy as possibl

This is difficult because, to a large extent, each country has its own set of

rules. For example, U.S. GAAP are different from Canadian GAAP.

Synchronizing accounting standards across the globe is an ongoing process

the international accounting community.

International Financial Reporting Standards(IFRS) are designed as a common global language for

business affairs so that company accounts are understandable and comparable across international

boundaries. They are a consequence of growing international shareholding and trade and are particularly

important for companies that have dealings in several countries. They are progressively replacing themany different national accounting standards. The rules to be followed by accountants to maintain books

of accounts which is comparable, understandable, reliable and relevant as per the users internal or

external.

IFRS began as an attempt to harmonize accounting across the European Union but the value of

harmonization quickly made the concept attractive around the world. They are sometimes still called by

the original name of International Accounting Standards(IAS). IAS were issued between 1973 and


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2001 by the Board of theInternational Accounting Standards Committee(IASC). On 1 April 2001, the

newInternational Accounting Standards Boardtook over from the IASC the responsibility for setting

International Accounting Standards. During its first meeting the new Board adopted existing IAS and

Standing Interpretations Committee standards (SICs). The IASB has continued to develop standards

calling the new standards International Financial Reporting Standards(IFRS).

In the absence of a Standard or an Interpretation that specifically applies to a transaction, management

must use its judgement in developing and applying an accounting policy that results in information that is

relevant and reliable. In making that judgement, IAS 8.11 requires management to consider the

definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in

the Framework.

History of ifrs

International convergence of accounting standards is not a new idea. The concept of

convergence first arose in the late 1950s in response to post World War II economic

integration and related increases in cross-border capital flows.

Initial efforts focused on harmonizationreducing differences among the accounting

principles used in major capital markets around the world. By the 1990s, the notion of

harmonization was replaced by the concept of convergencethe development of a unified

set of high-quality, international accounting standards that would be used in at least all

major capital markets.

The International Accounting Standards Committee, formed in 1973, was the first

international standards-setting body. It was reorganized in 2001 and became an

independent international standard setter, the International Accounting Standards Board(IASB). Since then, the use of international standards has progressed. As of 2013, the

European Union and more than 100 other countries either require or permit the use of

international financial reporting standards (IFRSs) issued by the IASB or a local variant of

them.

The FASB and the IASB have been working together since 2002 to improve and converge

U.S. generally accepted accounting principles (GAAP) and IFRS. As of 2013, Japan and

China were also working to converge their standards with IFRSs. The Securities and

Exchange Commission (SEC) consistently has supported convergence of global accounting

standards. However, the Commission has not yet decided whether to incorporateInternational Financial Reporting Standards ( IFRS) into the U.S. financial reporting

system. The Commission staff issued its final report on the issue in July 2012 without

making a recommendation.

The following is a chronology of some of the key events in the evolution of the international

convergence of accounting standards.
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The 1960sCalls for International Standards and Some Early Steps

The 1970s and 1980sAn International Standard-Setting Body Takes Root

The 1990sThe FASB Formalizes and Expands its International Activities

The 2000s

The Pace of Convergence Accelerates: Use of International Standards Grows Rapidly,the FASB and IASB Formally Collaborate, and the U.S. Explores Adopting International Accounting

Standards

Objective of ifrs

The International Accounting Standards Board (IASB) was established in 2001 and is the independent

standard-setting body of the IFRS Foundation, an independent, private sector, not-for-profit organisation

working in the public interest. Its principal objectives are:

1 to develop, in the public interest, a single set of high quality, understandable, enforceable and globally

accepted international financial reporting standards (IFRSs) based upon clearly articulated principles.

These standards should require high quality, transparent and comparable information in financial

statements and other financial reporting to help investors, other participants in the world's capital

markets and other users of financial information make economic decisions;

2 to promote the use and rigorous application of those standards;

3 in fulfilling the objectives associated with (1) and (2), to take account of, as appropriate, the needs of a

range of sizes and types of entities in diverse economic settings; and

4 to promote and facilitate adoption of IFRSs, being the standards and interpretations issued by the IASB,

through the convergence of national accounting standards and IFRSs.

The governance and oversight of the activities undertaken by the IFRS Foundation and its standard-

setting body rests with a geographically and professionally diverse body of Trustees, who are also

responsible for safeguarding the independence of the IASB and ensuring the financing of the organisation.

The Trustees are publicly accountable to a Monitoring Board of public authorities.

The IASB is an independent group of experts with an appropriate mix of recent practical experience in

setting accounting standards; in preparing, auditing, or using financial reports; and in accounting

education. Broad geographical diversity is also required. Members are appointed by the Trustees through

an open and rigorous process that includes advertising vacancies and consulting relevant organisations.

The IASB has 16 full-time members.
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The IASB develops and maintains a set of accounting requirements collectively referred to as

International Financial Reporting Standards (IFRSs). IFRSs are a set of high quality, understandable,

enforceable and globally accepted Standards based up on clearly articulated accounting principles. The

IASB has no authority to impose those Standards. However, entities that wish, or are required by a

particular jurisdiction, to assert compliance with IFRSs must comply with all of the individual IFRSs

(Standards) and IFRS Interpretations (Interpretations) issued by the IASB. The individual IFRSs and

Interpretations that comprise the collective IFRSs are 41 Standards (issued as at 1 December 2013: 13

IFRSs and 28 International Accounting Standards developed by its predecessor, the IASC, and adopted by

the IASB) and 25 current IFRIC Interpretations (17 developed by the IFRS Interpretations Committee

(formerly the International Financial Reporting Interpretations Committee) and 8 developed by its

predecessor, the Standing Interpretations Committee).

IFRSs generally contain principles and accompanying application guidance, both of which are mandatory

and carry equal weight. Some Standards also include illustrative examples or implementation guidance,

neither of which is part of IFRSs. They are therefore not mandatory. Each Standard and Interpretation has

a basis for conclusions that explains the IASB's reasons for developing the particular requirements. The

basis for conclusions is not part of IFRSs and is therefore also not mandatory.

Additionally, the IASB has a Conceptual Framework for Financial Reporting (the Framework). This

Framework is designed to help the IASB develop IFRSs. The Framework is also designed to help those

applying IFRSs address matters not covered by IFRSs. However, the Framework is not a Standard and theaccounting requirements in an IFRS take precedence over the Framework.

The IASB develops IFRSs in the public interest. Through the IASB's due process, it consults and engages

with investors, regulators, business leaders and the global accountancy profession at every stage of the

process, whilst maintaining collaborative efforts with the worldwide standard-setting community. In

developing IFRSs and Interpretations the IASB publishes and seeks public comment on Discussion Papers

and Exposure Drafts. Those documents are not part of IFRSs.

The IFRS Interpretations Committee is the interpretative body of the IASB. The Interpretations Committee

has 14 voting members appointed by the Trustees, and its members are drawn from a variety of countries

and professional backgrounds. The Interpretations Committee's mandate is to review on a timely basis

widespread accounting issues that have arisen within the context of current IFRSs and to provide

authoritative guidance (IFRIC Interpretations) on those issues. The Interpretations Committee also


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develops proposals for narrow scope amendments to IFRSs on behalf of the IASB. In developing

Interpretations and narrow scope amendments, the Interpretations Committee follows a transparent,

thorough and open due process. However, it is the IASB that issues Interpretations and narrow scope

amendments and the IASB that considers and votes on each Interpretation and narrow scope amendment

before it is issued.

As well as IFRSs, the Board has issued IFRS for SMEs, to meet the needs and capabilities of small and

medium-sized entities (SMEs) and users of their financial statements. Any company of any size is eligible

to use the IFRS for SMEs, provided it does not have public accountability. An entity has public

accountability if it is publicly traded, or if it is a financial institution or similar entity. The IFRS for SMEs is

based on IFRSs but is much less complex.

Assessment Methodology

DescriptionAs part of the Reports on the Observance of Standards and Codes (ROSC) initiative, the

World Bank has established a program to assist its member countries in implementing

international accounting and auditing standards for strengthening the financial reporting

regime. The objectives of this program are two-fold:

Analyze comparability of national accounting and auditing standards with international

standards, determine the degree with which applicable accounting and auditing

standards are complied, and assess strengths and weaknesses of the institutional

framework in supporting high-quality financial reporting.Assist the country in developing and implementing a country action plan for improving

institutional capacity with a view to strengthening the country's corporate financial

reporting regime.

Requirements of IFRS[edit]

SeeRequirements of IFRS.IFRS financial statements consist of (IAS1.8)

aStatement of Financial Position

aStatement of Comprehensive Incomeseparate statements comprising anIncomeStatementand separately a Statement of Comprehensive Income, which reconciles Profit or

Loss on the Income statement to totalcomprehensive income

aStatement of Changes in Equity(SOCE)

aCash Flow StatementorStatement of Cash Flows

notes, including a summary of the significant accounting policies
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Comparative information is required for the prior reporting period (IAS 1.36). 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 (IFRS1.7).

On 6 September 2007, the IASB issued a revisedIAS 1Presentation of Financial Statements. The

main changes from the previous version are to require that an entity must:

present all non-owner changes in equity (that is, 'comprehensive income' ) eitherin one

Statement of comprehensive income or in two statements (a separate income statement and a

statement of comprehensive income). Components of comprehensive income may notbe

presented in the Statement of changes in equity.

present a statement of financial position (balance sheet) as at the beginning of the earliest

comparative period in a complete set of financial statements when the entity applies the new

standard.

present a statement of cash flow.

make necessary disclosure by the way of a note.

The revised IAS 1 is effective for annual periods beginning on or after 1 January 2009. Early adoption

is permitted.

Adoption of IFRS[edit]

IFRS is used in many parts of the world, including the European Union,India,Hong Kong,

Australia,Malaysia,Pakistan,GCC countries,Russia,Chile,South Africa,SingaporeandTurkey.As

of August 2008, more than 113 countries around the world, including all of Europe, currently require

or permit IFRS reporting and 85 require IFRS reporting for all domestic, listed companies, according

to theU.S. Securities and Exchange Commission.[9]

It is generally expected that IFRS adoption worldwide will be beneficial to investors and other users of

financial statements, by reducing the costs of comparing alternative investments and increasing the

quality of information.[10]Companies are also expected to benefit, as investors will be more willing to

provide financing.[10]Companies that have high levels of international activities are among the group

that would benefit from a switch to IFRS. Companies that are involved in foreign activities and

investing benefit from the switch due to the increased comparability of a set accounting

standard.[11]However,Ray J. Ballhas expressed some skepticism of the overall cost of the

international standard; he argues that the enforcement of the standards could be lax, and the regional

differences in accounting could become obscured behind a label. He also expressed concerns about

the fair value emphasis of IFRS and the influence of accountants from non-common-lawregions,where losses have been recognized in a less timely manner. [10]

For a current overview seePwC's map of countries that apply IFRS.

Australia[edit]

TheAustralian Accounting Standards Board(AASB) has issued 'Australian equivalents to IFRS' (A-

IFRS), numbering IFRS standards as AASB 18 and IAS standards as AASB 101141. Australian

equivalents to SIC and IFRIC Interpretations have also been issued, along with a number of
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ropean_Unionhttp://en.wikipedia.org/w/index.php?title=International_Financial_Reporting_Standards&action=edit&section=10http://en.wikipedia.org/wiki/IAS_1


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'domestic' standards and interpretations. These pronouncements replaced previous Australian

generally accepted accounting principles with effect from annual reporting periods beginning on or

after 1 January 2005 (i.e. 30 June 2006 was the first report prepared under IFRS-equivalent

standards for June year ends). To this end, Australia, along with Europe and a few other countries,

was one of the initial adopters of IFRS for domestic purposes (in the developed world). It must be

acknowledged, however, that IFRS and primarily IAS have been part and parcel of accountingstandard package in the developing world for many years since the relevant accounting bodies were

more open to adoption of international standards for many reasons including that of capability.

The AASB has made certain amendments to the IASB pronouncements in making A-IFRS, however

these generally have the effect of eliminating an option under IFRS, introducing additional disclosures

or implementing requirements for not-for-profit entities, rather than departing from IFRS for Australian

entities. Accordingly, for-profit entities that prepare financial statements in accordance with A-IFRS

are able to make an unreserved statement of compliance with IFRS.

The AASB continues to mirror changes made by the IASB as local pronouncements. In addition, over

recent years, the AASB has issued so-called 'Amending Standards' to reverse some of the initial

changes made to the IFRS text for local terminology differences, to reinstate options and eliminate

some Australian-specific disclosure. There are some calls for Australia to simply adopt IFRS without

'Australianising' them and this has resulted in the AASB itself looking at alternative ways of adopting

IFRS in Australia

Canada[edit]

The use of IFRS became a requirement for Canadian publicly accountable profit-oriented enterprises

for financial periods beginning on or after 1 January 2011. This includes public companies and other

"profit-oriented enterprises that are responsible to large or diverse groups of shareholders."[12]

European Union[edit]

All listed EU companies have been required to use IFRS since 2005.

In order to be approved for use in the EU, standards must be endorsed by the Accounting Regulatory

Committee (ARC), which includes representatives of member state governments and is advised by a

group of accounting experts known as the European Financial Reporting Advisory Group. As a result

IFRS as applied in the EU may differ from that used elsewhere.

Parts of the standardIAS 39: Financial Instruments: Recognition and Measurementwere not

originally approved by the ARC. IAS 39 was subsequently amended, removing the option to record

financial liabilities at fair value, and the ARC approved the amended version. TheIASBis working

with the EU to find an acceptable way to remove a remaining anomaly in respect ofhedge

accounting.TheWorld BankCentre for Financial Reporting Reformis working with countries in the

ECA region to facilitate the adoption of IFRS and IFRS for SMEs.

India[edit]

The (ICAI) has announced that IFRS will be mandatory in India forfinancial statementsfor the

periods beginning on or after 1 April 2012, but this plan has been failed and IFRS/IND-AS (Coverged

IFRS) are still not applicable. There was a roadmap as given below but still Indian companies are

following old Indian GAAP.There is no clear new date of adoption of IFRS.
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Reserve Bank of Indiahas stated that financial statements of banks need to be IFRS-compliant for

periods beginning on or after 1 April 2011.

The ICAI has also stated that IFRS will be applied to companies above INR 1000 crore(INR 10

billion) from April 2011. Phase wise applicability details for different companies in India:

Phase 1: Opening balance sheet as at 1 April 2011*i. Companies which are part of NSE IndexNifty 50

ii. Companies which are part of BSE Sensex BSE 30

a. Companies whose shares or other securities are listed on a stock exchange outside India

b. Companies, whether listed or not, having net worth of more than INR 1000 crore (INR 10 billion)

Phase 2: Opening balance sheet as at 1 April 2012*

Companies not covered in phase 1 and having net worth exceeding INR 500 crore (INR 5 billion)

Phase 3: Opening balance sheet as at 1 April 2014*

Listed companies not covered in the earlier phases * If the financial year of a company commencesat a date other than 1 April, then it shall prepare its opening balance sheet at the commencement of

immediately following financial year.

On 22 January 2010, the Ministry of Corporate Affairs issued the road map for transition to IFRS. It is

clear that India has deferred transition to IFRS by a year. In the first phase, companies included in

Nifty 50 or BSE Sensex, and companies whose securities are listed on stock exchanges outside India

and all other companies having net worth of INR 10 billion will prepare and present financial

statements using Indian Accounting Standards converged with IFRS. According to the press note

issued by the government, those companies will convert their first balance sheet as at 1 April 2011,

applying accounting standards convergent with IFRS if the accounting year ends on 31 March. This

implies that the transition date will be 1 April 2011. According to the earlier plan, the transition date

was fixed at 1 April 2010.

The press note does not clarify whether the full set of financial statements for the year 201112 will

be prepared by applying accounting standards convergent with IFRS. The deferment of the transition

may make companies happy, but it will undermine India's position. Presumably, lack of preparedness

of Indian companies has led to the decision to defer the adoption of IFRS for a year. This is

unfortunate that India, which boasts for its IT and accounting skills, could not prepare itself for the

transition to IFRS over last four years. But that might be the ground reality.

Transition in phases

Companies, whether listed or not, having net worth of more than INR 5 billion will convert their

opening balance sheet as at 1 April 2013. Listed companies having net worth of INR 5 billion or less

will convert their opening balance sheet as at 1 April 2014. Un-listed companies having net worth of

Rs5 billion or less will continue to apply existing accounting standards, which might be modified from

time to time. Transition to IFRS in phases is a smart move.

The transition cost for smaller companies will be much lower because large companies will bear the

initial cost of learning and smaller companies will not be required to reinvent the wheel. However, this

will happen only if a significant number of large companies engage Indian accounting firms to provide

them support in their transition to IFRS. If, most large companies, which will comply with Indian
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accounting standards convergent with IFRS in the first phase, choose one of the international firms,

Indian accounting firms and smaller companies will not benefit from the learning in the first phase of

the transition to IFRS.

It is likely that international firms will protect their learning to retain their competitive advantage.

Therefore, it is for the benefit of the country that each company makes judicious choice of the

accounting firm as its partner without limiting its choice to international accounting firms. Public sectorcompanies should take the lead and the Institute of Chartered Accountants of India (ICAI) should

develop a clear strategy to diffuse the learning.

Size of companies

The government has decided to measure the size of companies in terms of net worth. This is not the

ideal unit to measure the size of a company. Net worth in the balance sheet is determined by

accounting principles and methods. Therefore, it does not include the value of intangible assets.

Moreover, as most assets and liabilities are measured at historical cost, the net worth does not reflect

the current value of those assets and liabilities. Market capitalisation is a better measure of the size

of a company. But it is difficult to estimate market capitalisation or fundamental value of unlisted

companies. This might be the reason that the government has decided to use 'net worth' to measure

size of companies. Some companies, which are large in terms of fundamental value or which intend

to attract foreign capital, might prefer to use Indian accounting standards convergent with IFRS

earlier than required under the road map presented by the government. The government should

provide that choice.[13]

Japan[edit]

The minister for Financial Services in Japan announced in late June 2011 that mandatory application

of the IFRS should not take place from fiscal year-ending March 2015; five to seven years should be

required for preparation if mandatory application is decided; and to permit the use of U.S. GAAP

beyond the fiscal year ending 31 March 2016.[14]

Montenegro[edit]Montenegrogained independence fromSerbiain 2006. Its accounting standard setter is the Institute

of Accountants and Auditors of Montenegro (IAAM).[15]:2In 2005, IAAM adopted a revised version of

the 2002 "Law on Accounting and Auditing" which authorized the use of IFRS for all

entities.[15]:18IFRS is currently required for all consolidated and standalone financial statements,

however, enforcement is not effective except in the banking sector.[15]:18Financial statements for

banks in Montenegro are, generally, of high quality and can be compared to those of the European

Union.[15]:3Foreign companies listed on Montenegro's two stock exchanges (Montenegro Stock

ExchangeandNEX Stock Exchange)are also required to apply IFRS in their financial

statements.[16]Montenegro does not have a nationalGAAP.[15]:18Currently,

noMontenegrintranslation of IFRS exists, and because of this Montenegro appliestheSerbiantranslation from 2010.[17]:20IFRS forSMEsis not currently applied in Montenegro.[17]:20

Pakistan[edit]

All listed companies must follow all issued IAS/IFRS except the following:

IAS 39 and IAS 42: Implementation of these standards has been held in abeyance by State Bank of

Pakistan for Banks and DFIs

IFRS-1: Effective for the annual periods beginning on or after 1 January 2004. This IFRS is being
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ial_Reporting_Standards&action=edit&section=17http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-IFAC2011-17http://en.wikipedia.org/wiki/Small_and_medium_enterprisehttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-IFAC2011-17http://en.wikipedia.org/wiki/Serbian_languagehttp://en.wikipedia.org/wiki/Montenegrin_languagehttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-WorldBank2007-15http://en.wikipedia.org/wiki/Generally_accepted_accounting_principleshttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-PWC2010-16http://en.wikipedia.org/wiki/NEX_Stock_Exchangehttp://en.wikipedia.org/wiki/Montenegro_Stock_Exchangehttp://en.wikipedia.org/wiki/Montenegro_Stock_Exchangehttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-WorldBank2007-15http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-WorldBank2007-15http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-WorldBank2007-15http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-WorldBank2007-15http://en.wikipedia.org/wiki/Serbiahttp://en.wikipedia.org/wiki/Montenegrohttp://en.wikipedia.org/w/index.php?title=International_Financial_Reporting_Standards&action=edit&section=16http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-14http://en.wikipedia.org/w/index.php?title=International_Financial_Reporting_Standards&action=edit&section=15http://en.wikipedia.org/wiki/International_Financial_Reporting_Standards#cite_note-13


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considered for adoption for all companies other than banks and DFIs.

IFRS-9: Under consideration of the relevant Committee of the Institutes (ICAP & ICMAP). This IFRS

will be effective for the annual periods beginning on or after 1 January 2013.

Russia[edit]

The government of Russia has been implementing a program to harmonize itsnational accountingstandardswith IFRS since 1998. Since then twenty new accounting standards were issued by the

Ministry of Finance of the Russian Federation aiming to align accounting practices with IFRS. Despite

these efforts essential differences between Russian accounting standards and IFRS remain. Since

2004 all commercial banks have been obliged to prepare financial statements in accordance with

both Russian accounting standards and IFRS. Full transition to IFRS is delayed but starting 2012

new modifications making Russian GAAP converging to IFRS have been made. They notably include

the booking of reserves for bad debts and contingent liabilities and the devaluation of inventory and

financial assets.

Still, several differences between the two sets of account still remain. Major reasons for deviation

between Russian GAAP and IFRS / US-GAAP (e.g. when the Russian affiliate of a larger group need

to be consolidated to the mother company) are the following:

1) Booking of payables in theGeneral Ledgeraccording to national accounting standards can only be

made upon recepit of the actual acceptance protocol (good's receipt). Indeed in Russia, opposely to

IFRS and US-GAAP, the invoice (outgoing or incoming) is not an official tax or accounting document

and does not trigger any boolking. There is also no provision to book in the General Ledger any

expense for goods and services that according to a contract are effectively received but for whom

documents are still not exchanged.

2) There is no possibility under Russian GAAP to recognise the good-will as an intangible asset in the

balance sheet of a company. This has a major consequence when a company in sold. Indeed, if a

company (or part of it) is sold at a higher value than its book value (i.e. to account for the good-willvalue), the selling party need to pay tax at the relevant profit tax rate (20% in 2013) on the difference

in value between selling and accounting value and the buyer has no possibility to ammortize the cost

and deduct it from present and future revenues.

3) There is no equivalent of IAS 37 in the Russian GAAP. Loans and monetary securitiesare not

discounted, so the present value of such financial assets is not discounted for the relevant interest

rates at the different maturities of the loans.

Singapore[edit]

In Singapore the Accounting Standards Committee (ASC) is in charge of standard setting. Singapore

closely models its Financial Reporting Standards (FRS) according to the IFRS, with appropriate

changes made to suit the Singapore context. Before a standard is enacted, consultations with the

IASB are made to ensure consistency of core principles.[18]

South Africa[edit]

All companies listed on theJohannesburg Stock Exchangehave been required to comply with the

requirements of International Financial Reporting Standards since 1 January 2005.
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The IFRS for SMEs may be applied by 'limited interest companies', as defined in the South African

Corporate Laws Amendment Act of 2006 (that is, they are not 'widely held'), if they do not have public

accountability (that is, not listed and not a financial institution). Alternatively, the company may

choose to apply full South African Statements of GAAP or IFRS.

South African Statements of GAAP are entirely consistent with IFRS, although there may be a delay

between issuance of an IFRS and the equivalent SA Statement of GAAP (can affect voluntary early

adoption).

Taiwan[edit]

Adoption scope and timetable

(1) Phase I companies: listed companies and financial institutions supervised by the Financial

Supervisory Commission (FSC), except for credit cooperatives, credit card companies and insurance

intermediaries:

A. They will be required to prepare financial statements in accordance with Taiwan-IFRS start ing

from 1 January 2013.B. Early optional adoption: Firms that have already issued securities overseas, or have registered

an overseas securities issuance with

the FSC, or have a market capitalization of greater than NT$10 billion, will be permitted to

prepare additional consolidated financial statements[TW-original 1]in accordance with Taiwan-IFRS

starting from 1 January 2012. If a company without subsidiaries is not required to prepare

consolidated financial statements, it will be permitted to prepare additional individual financial

statements on the above conditions.

(2) Phase II companies: unlisted public companies, credit cooperatives and credit card

companies:

A. They will be required to prepare financial statements in accordance with Taiwan-IFRS start ing

from 1 January 2019

B. They will be permitted to apply Taiwan-IFRS starting from 1 January 2013.

(3) Pre-disclosure about the IFRS adoption plan, and the impact of adoption

To prepare properly for IFRS adoption, domestic companies should propose an

IFRS adoption plan and establish a specific taskforce. They should also

disclose the related information from 2 years prior to adoption, as follows:

A. Phase I companies:

(A) They will be required to disclose the adoption plan, and the impact of adoption, in 2011

annual financial statements, and in 2012 interim and annual financial statements.

(B) Early optional adoption:
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a. Companies adopting IFRS early will be required to disclose the adoption plan, and the impact

of adoption, in 2010 annual financial statements, and in 2011 interim and annual financial

statements.

b. If a company opts for early adoption of Taiwan-IFRS after 1 January 2011, it will be required to

disclose the adoption plan, and the impact of adoption, in 2011 interim and annual financial

statements commencing on the decision date.

B. Phase II companies will be required to disclose the related information from 2 years prior to

adoption, as stated above.

1. Jump up^To maintain the consistency of information declaration

and supervision with other companies, the early adopted companies

should still prepare individual and consolidated financial statements

in accordance with domestic accounting standards.

Year Work Plan

2008

Establishment of IFRS Taskforce

2009~2011

Acquisition of authorization to translate IFRS

Translation, review, and issuance of IFRS

Analysis of possible IFRS implementation problems,and resolutionthereof

Proposal for modification of the related regulations and

supervisory mechanisms

Enhancement of related publicity and training activities

2012

IFRS application permitted for Phase I companies

Study on possible IFRS implementation problems,and resolution

thereof

Completion of amendments to the related regulations andsupervisory mechanisms

Enhancement of the related publicity and training activities

2013

Application of IFRS required for Phase I companies,and permitted

for Phase II companies
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Interpretations originated from the International Financial Reporting Interpretations Committee (IFRICs); and

Standing Interpretations Committee (SICs).[2][3]

The list contains all standards and interpretations regardless whether they have been suspended. Full texts are available on

the IASB website.

International Financial Reporting Standards

# Name Issued

IFRS 1 First-time Adoption of International Financial Standards 2008*

IFRS 2 Share-based Payment 2004

IFRS 3 Business Combinations 2008*

IFRS 4 Insurance Contracts 2004

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 2004

IFRS 6 Exploration for and Evaluation of Mineral Assets 2004

IFRS 7 Financial Instruments: Disclosures 2005

IFRS 8 Operating Segments 2006

IFRS 9 Financial Instruments 2013*

IFRS 10 Consolidated Financial Statements 2011

IFRS 11 Joint Arrangements 2011

IFRS 12 Disclosure of Interests in Other Entities 2011
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IFRS 13 Fair Value Measurement 2011

International Accounting Standards

# Name Issued

IAS 1 Presentation of Financial Statements 2007*

IAS 2 Inventories 2005*

IAS 3

Consolidated Financial Statements

Superseded in 1989 by IAS 27 and IAS 28 1976

IAS 4

Depreciation Accounting

Withdrawn in 1999

IAS 5

Information to Be Disclosed in Financial Statements

Superseded by IAS 1 effective 1 July 1998 1976

IAS 6

Accounting Responses to Changing Prices

Superseded by IAS 15, which was withdrawn December 2003

IAS 7 Statement of Cash Flows 1992

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 2003

IAS 9

Accounting for Research and Development Activities

Superseded by IAS 39 effective 1 July 1999

IAS 10 Events After the Reporting Period 2003

IAS 11 Construction Contracts 1993

IAS 12 Income Taxes 1996*
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IAS 13

Presentation of Current Assets and Current Liabilities

Superseded by IAS 39 effective 1 July 1998

IAS 14

Segment Reporting

Superseded by IFRS 8 effective 1 January 2009 1997

IAS 15

Information Reflecting the Effects of Changing Prices

Withdrawn December 2003 2003

IAS 16 Property, Plant and Equipment 2003*

IAS 17 Leases 2003*

IAS 18 Revenue 1993*

IAS 19

Employee Benefits(1998)

Superseded by IAS 19 (2011) effective 1 January 2013 1998

IAS 19 Employee Benefits(2011) 2011*

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance 1983

IAS 21 The Effects of Changes in Foreign Exchange Rates 2003*

IAS 22

Business Combinations

Superseded by IFRS 3 effective 31 March 2004 1998*

IAS 23 Borrowing Costs 2007*

IAS 24 Related Party Disclosures 2009*

IAS 25

Accounting for Investments

Superseded by IAS 39 and IAS 40 effective 2001

IAS 26 Accounting and Reporting by Retirement Benefit Plans 1987
http://www.iasplus.com/en/standards/ias/ias14http://www.iasplus.com/en/standards/ias/ias14http://www.iasplus.com/en/standards/ias/ias15http://www.iasplus.com/en/standards/ias/ias15http://www.iasplus.com/en/standards/ias/ias16http://www.iasplus.com/en/standards/ias/ias16http://www.iasplus.com/en/standards/ias/ias17http://www.iasplus.com/en/standards/ias/ias17http://www.iasplus.com/en/standards/ias/ias18http://www.iasplus.com/en/standards/ias/ias18http://www.iasplus.com/en/standards/ias/ias19_1998http://www.iasplus.com/en/standards/ias/ias19_1998http://www.iasplus.com/en/standards/ias/ias19http://www.iasplus.com/en/standards/ias/ias19http://www.iasplus.com/en/standards/ias/ias20http://www.iasplus.com/en/standards/ias/ias20http://www.iasplus.com/en/standards/ias/ias21http://www.iasplus.com/en/standards/ias/ias21http://www.iasplus.com/en/standards/ias/ias22http://www.iasplus.com/en/standards/ias/ias22http://www.iasplus.com/en/standards/ias/ias23http://www.iasplus.com/en/standards/ias/ias23http://www.iasplus.com/en/standards/ias/ias24http://www.iasplus.com/en/standards/ias/ias24http://www.iasplus.com/en/standards/ias/ias26http://www.iasplus.com/en/standards/ias/ias26http://www.iasplus.com/en/standards/ias/ias26http://www.iasplus.com/en/standards/ias/ias24http://www.iasplus.com/en/standards/ias/ias23http://www.iasplus.com/en/standards/ias/ias22http://www.iasplus.com/en/standards/ias/ias21http://www.iasplus.com/en/standards/ias/ias20http://www.iasplus.com/en/standards/ias/ias19http://www.iasplus.com/en/standards/ias/ias19_1998http://www.iasplus.com/en/standards/ias/ias18http://www.iasplus.com/en/standards/ias/ias17http://www.iasplus.com/en/standards/ias/ias16http://www.iasplus.com/en/standards/ias/ias15http://www.iasplus.com/en/standards/ias/ias14


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IAS 27 Separate Financial Statements(2011) 2011

IAS 27

Consolidated and Separate Financial Statements

Superseded by IFRS 10, IFRS 12 and IAS 27 (2011) effective 1 January 2013 2003

IAS 28 Investments in Associates and Joint Ventures (2011) 2011

IAS 28

Investments in Associates

Superseded by IAS 28 (2011) and IFRS 12 effective 1 January 2013 2003

IAS 29 Financial Reporting in Hyperinflationary Economies 1989

IAS 30

Disclosures in the Financial Statements of Banks and Similar Financial

Institutions


IAS 31

Interests In Joint Ventures

Superseded by IFRS 11 and IFRS 12 effective 1 January 2013 2003*

IAS 32 Financial Instruments: Presentation 2003*

IAS 33 Earnings Per Share 2003*

IAS 34 Interim Financial Reporting 1998

IAS 35

Discontinuing Operations


IAS 36 Impairment of Assets 2004*

IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1998

IAS 38 Intangible Assets 2004*

IAS 39 Financial Instruments: Recognition and Measurement

Superseded by IFRS 9 where IFRS 9 is applied2003*
http://www.iasplus.com/en/standards/ias/ias27-2011http://www.iasplus.com/en/standards/ias/ias27-2011http://www.iasplus.com/en/standards/ias/ias27http://www.iasplus.com/en/standards/ias/ias27http://www.iasplus.com/en/standards/ias/ias28-2011http://www.iasplus.com/en/standards/ias/ias28-2011http://www.iasplus.com/en/standards/ias/ias28http://www.iasplus.com/en/standards/ias/ias28http://www.iasplus.com/en/standards/ias/ias29http://www.iasplus.com/en/standards/ias/ias29http://www.iasplus.com/en/standards/ias/ias30http://www.iasplus.com/en/standards/ias/ias30http://www.iasplus.com/en/standards/ias/ias31http://www.iasplus.com/en/standards/ias/ias31http://www.iasplus.com/en/standards/ias/ias32http://www.iasplus.com/en/standards/ias/ias32http://www.iasplus.com/en/standards/ias/ias33http://www.iasplus.com/en/standards/ias/ias33http://www.iasplus.com/en/standards/ias/ias34http://www.iasplus.com/en/standards/ias/ias34http://www.iasplus.com/en/standards/ias/ias35http://www.iasplus.com/en/standards/ias/ias35http://www.iasplus.com/en/standards/ias/ias36http://www.iasplus.com/en/standards/ias/ias36http://www.iasplus.com/en/standards/ias/ias37http://www.iasplus.com/en/standards/ias/ias37http://www.iasplus.com/en/standards/ias/ias38http://www.iasplus.com/en/standards/ias/ias38http://www.iasplus.com/en/standards/ias/ias39http://www.iasplus.com/en/standards/ias/ias39http://www.iasplus.com/en/standards/ias/ias39http://www.iasplus.com/en/standards/ias/ias38http://www.iasplus.com/en/standards/ias/ias37http://www.iasplus.com/en/standards/ias/ias36http://www.iasplus.com/en/standards/ias/ias35http://www.iasplus.com/en/standards/ias/ias34http://www.iasplus.com/en/standards/ias/ias33http://www.iasplus.com/en/standards/ias/ias32http://www.iasplus.com/en/standards/ias/ias31http://www.iasplus.com/en/standards/ias/ias30http://www.iasplus.com/en/standards/ias/ias29http://www.iasplus.com/en/standards/ias/ias28http://www.iasplus.com/en/standards/ias/ias28-2011http://www.iasplus.com/en/standards/ias/ias27http://www.iasplus.com/en/standards/ias/ias27-2011


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IAS 40 Investment Property 2003*

IAS 41 Agriculture 2001

IFRIC Interpretations

# Name Issued

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities 2004

IFRIC 2 Members' Shares in Co-operative Entities and Similar Instruments 2004

IFRIC 3

Emission Rights

Withdrawn June 2005 2004

IFRIC 4 Determining Whether an Arrangement Contains a Lease 2004

IFRIC 5

Rights to Interests arising from Decommissioning, Restoration and

Environmental Rehabilitation Funds 2004

IFRIC 6

Liabilities Arising from Participating in a Specific Market - Waste Electrical

and Electronic Equipment 2005

IFRIC 7

Applying the Restatement Approach under IAS 29 Financial Reporting in

Hyperinflationary Economies 2005

IFRIC 8

Scope of IFRS 2

Withdrawn effective 1 January 2010 2006

IFRIC 9 Reassessment of Embedded Derivatives 2006

IFRIC

10 Interim Financial Reporting and Impairment 2006
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IFRIC

11

IFRS 2: Group and Treasury Share Transactions

Withdrawn effective 1 January 2010 2006

IFRIC

12 Service Concession Arrangements 2006

IFRIC

13 Customer Loyalty Programmes 2007

IFRIC

14

IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding

Requirements and their Interaction 2007

IFRIC

15 Agreements for the Construction of Real Estate 2008

IFRIC

16 Hedges of a Net Investment in a Foreign Operation 2008

IFRIC

17 Distributions of Non-cash Assets to Owners 2008

IFRIC

18 Transfers of Assets from Customers 2009

IFRIC

19 Extinguishing Financial Liabilities with Equity Instruments 2009

IFRIC

20 Stripping Costs in the Production Phase of a Surface Mine 2011

IFRIC

21 Levies 2013

SIC Interpretations

# Name Issued
http://www.iasplus.com/en/standards/ifric/ifric11http://www.iasplus.com/en/standards/ifric/ifric11http://www.iasplus.com/en/standards/ifric/ifric12http://www.iasplus.com/en/standards/ifric/ifric12http://www.iasplus.com/en/standards/ifric/ifric13http://www.iasplus.com/en/standards/ifric/ifric13http://www.iasplus.com/en/standards/ifric/ifric14http://www.iasplus.com/en/standards/ifric/ifric14http://www.iasplus.com/en/standards/ifric/ifric15http://www.iasplus.com/en/standards/ifric/ifric15http://www.iasplus.com/en/standards/ifric/ifric16http://www.iasplus.com/en/standards/ifric/ifric16http://www.iasplus.com/en/standards/ifric/ifric17http://www.iasplus.com/en/standards/ifric/ifric17http://www.iasplus.com/en/standards/ifric/ifric18http://www.iasplus.com/en/standards/ifric/ifric18http://www.iasplus.com/en/standards/ifric/ifric19http://www.iasplus.com/en/standards/ifric/ifric19http://www.iasplus.com/en/standards/ifric/ifric20http://www.iasplus.com/en/standards/ifric/ifric20http://www.iasplus.com/en/standards/ifric/ifric21http://www.iasplus.com/en/standards/ifric/ifric21http://www.iasplus.com/en/standards/ifric/ifric21http://www.iasplus.com/en/standards/ifric/ifric21http://www.iasplus.com/en/standards/ifric/ifric20http://www.iasplus.com/en/standards/ifric/ifric20http://www.iasplus.com/en/standards/ifric/ifric19http://www.iasplus.com/en/standards/ifric/ifric19http://www.iasplus.com/en/standards/ifric/ifric18http://www.iasplus.com/en/standards/ifric/ifric18http://www.iasplus.com/en/standards/ifric/ifric17http://www.iasplus.com/en/standards/ifric/ifric17http://www.iasplus.com/en/standards/ifric/ifric16http://www.iasplus.com/en/standards/ifric/ifric16http://www.iasplus.com/en/standards/ifric/ifric15http://www.iasplus.com/en/standards/ifric/ifric15http://www.iasplus.com/en/standards/ifric/ifric14http://www.iasplus.com/en/standards/ifric/ifric14http://www.iasplus.com/en/standards/ifric/ifric13http://www.iasplus.com/en/standards/ifric/ifric13http://www.iasplus.com/en/standards/ifric/ifric12http://www.iasplus.com/en/standards/ifric/ifric12http://www.iasplus.com/en/standards/ifric/ifric11http://www.iasplus.com/en/standards/ifric/ifric11


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SIC-

1

ConsistencyDifferent Cost Formulas for Inventories

Superseded 1997

SIC-

2

ConsistencyCapitalisation of Borrowing Costs

Superseded 1997

SIC-

3

Elimination of Unrealised Profits and Losses on Transactions with Associates

Superseded 1997

SIC-

5

Classification of Financial Instruments - Contingent Settlement Provisions

Superseded 1998

SIC-

6

Costs of Modifying Existing Software

Superseded 1998

SIC-

7 Introduction of the Euro 1998

SIC-

8

First-Time Application of IASs as the Primary Basis of Accounting

Superseded 1998

SIC-9

Business Combinations Classification either as Acquisitions or Unitings of

InterestsSuperseded 1998

SIC-

10 Government Assistance No Specific Relation to Operating Activities 1998

SIC-

11

Foreign Exchange Capitalisation of Losses Resulting from Severe Currency

Devaluations

Superseded 1998

SIC-

12

ConsolidationSpecial Purpose Entities

Superseded by IFRS 10 and IFRS 12 effective 1 January 2013 1998

SIC-

13

Jointly Controlled Entities Non-Monetary Contributions by Venturers

Superseded by IFRS 11 and IFRS 12, effective for annual periods beginning on or

after 1 January 2013 1998
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SIC-

14

Property, Plant and Equipment Compensation for the Impairment or Loss of

Items

Superseded 1998

SIC-15 Operating Leases Incentives 1999

SIC-

16

Share Capital Reacquired Own Equity Instruments (Treasury Shares)

Superseded 1999

SIC-

17

EquityCosts of an Equity Transaction

Superseded 2000

SIC-18

Consistency

Alternative MethodsSuperseded 2000

SIC-

19

Reporting Currency Measurement and Presentation of Financial Statements

under IAS 21 and IAS 29

Superseded 2000

SIC-

20

Equity Accounting Method Recognition of Losses

Superseded 2000

SIC-

21

Income Taxes Recovery of Revalued Non-Depreciable Assets

Superseded by, and incorporated into, IAS 12 by amendments made by Deferred

Tax: Recovery of Underlying Assets, effective for annual periods beginning on or

after 1 January 2012 2000

SIC-

22

Business Combinations Subsequent Adjustment of Fair Values and Goodwill

Initially Reported

Superseded 2000

SIC-23

Property, Plant and Equipment

Major Inspection or Overhaul CostsSuperseded 2000

SIC-

24

Earnings Per Share Financial Instruments and Other Contracts that May Be

Settled in Shares

Superseded 2000
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SIC-

25 Income Taxes Changes in the Tax Status of an Enterprise or its Shareholders 2000

SIC-

27 Evaluating the Substance of Transactions in the Legal Form of a Lease 2000

SIC-

28

Business Combinations 'Date of Exchange' and Fair Value of Equity

Instruments

Superseded 2001

SIC-

29 DisclosureService Concession Arrangements 2001

SIC-

30

Reporting Currency

Translation from Measurement Currency to PresentationCurrency

Superseded 2001

SIC-

31 Revenue Barter Transactions Involving Advertising Services 2001

SIC-

32 Intangible Assets Web Site Costs 2001

SIC-

33

Consolidation and Equity Method Potential Voting Rights and Allocation of

Ownership Interests

Superseded 2001

Other pronouncements

Name Issued

Conceptual Framework for Financial Statements 2010 2010

Preface to Internat ional Financial Report ing Standards 2002*

IFRS for Sm all and Medium Sized Ent i t ies 2009
http://www.iasplus.com/en/standards/sic/sic-25http://www.iasplus.com/en/standards/sic/sic-25http://www.iasplus.com/en/standards/sic/sic-27http://www.iasplus.com/en/standards/sic/sic-27http://www.iasplus.com/en/standards/sic/sic-28http://www.iasplus.com/en/standards/sic/sic-28http://www.iasplus.com/en/standards/sic/sic-29http://www.iasplus.com/en/standards/sic/sic-29http://www.iasplus.com/en/standards/sic/sic-30http://www.iasplus.com/en/standards/sic/sic-30http://www.iasplus.com/en/standards/sic/sic-31http://www.iasplus.com/en/standards/sic/sic-31http://www.iasplus.com/en/standards/sic/sic-32http://www.iasplus.com/en/standards/sic/sic-32http://www.iasplus.com/en/standards/sic/sic-33http://www.iasplus.com/en/standards/sic/sic-33http://www.iasplus.com/en/standards/other/frameworkhttp://www.iasplus.com/en/standards/other/frameworkhttp://www.iasplus.com/en/standards/other/prefacehttp://www.iasplus.com/en/standards/other/prefacehttp://www.iasplus.com/en/standards/other/ifrs-for-smeshttp://www.iasplus.com/en/standards/other/ifrs-for-smeshttp://www.iasplus.com/en/standards/other/ifrs-for-smeshttp://www.iasplus.com/en/standards/other/prefacehttp://www.iasplus.com/en/standards/other/frameworkhttp://www.iasplus.com/en/standards/sic/sic-33http://www.iasplus.com/en/standards/sic/sic-33http://www.iasplus.com/en/standards/sic/sic-32http://www.iasplus.com/en/standards/sic/sic-32http://www.iasplus.com/en/standards/sic/sic-31http://www.iasplus.com/en/standards/sic/sic-31http://www.iasplus.com/en/standards/sic/sic-30http://www.iasplus.com/en/standards/sic/sic-30http://www.iasplus.com/en/standards/sic/sic-29http://www.iasplus.com/en/standards/sic/sic-29http://www.iasplus.com/en/standards/sic/sic-28http://www.iasplus.com/en/standards/sic/sic-28http://www.iasplus.com/en/standards/sic/sic-27http://www.iasplus.com/en/standards/sic/sic-27http://www.iasplus.com/en/standards/sic/sic-25http://www.iasplus.com/en/standards/sic/sic-25


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IFRS Practice Statement Management Commentary 2010

Note

The above tables list the most recent version (or versions if a pronouncement has not yet been superseded) of each

pronouncement and the date that revisions was originally issued. Where a pronouncement has been reissued with the same

or a different name, the date indicated in the above tables is the date the revised pronouncement was reissued (these are

indicated with an asterisk (*) in the tables). The majority of the pronouncements have also been amended through IASB or

IFRS Interpretations Committee projects, for consequential amendments arising on the issue of other pronouncements, the

annual improvements process, and other factors. Our page for each pronouncement has a full history of the pronouncement,

its development, amendments and other information.

ADVANTAGES

IFRS is a principle based model as compared to rule based US GAAP. IFRS requires extensive use of fair valuations formeasurement of assets and liabilities. The objective of IFRS is to set the Balance Sheet right, and hence a significant

volatility may come in Profit & Loss statement.

a) Improved access to Global Market

Majority of the Stock exchange globally require financial information as per IFRS. If the financial information is as perIndian Accounting Standard then a risk premium is added in pricing.

b) Lower Cost of Capital

Convergence with IFRS means the Indian companies need not prepare two sets of Financial Statements to comply with the

requirements abroad and this would lead to lower cost of administration, removal risk premium and hence pricing and thecompanies can approach any market for capital.

c) Benchmarking with Global Peers

Preparing accounts as per IFRS will give better understanding of performance relative to the Global peers / benchmarks.Targets and Milestones will be set based on global business environment instead of Local.

d) True Value of acquisition

In Indian GAAP except for a few exceptions net assets acquired is recorded on the carrying value instead of fair value.Hence the true value of the combination is not reflected. IFRS overcomes this flaw as it mandates accounting of businesscombinations at fair value.

. Advantages of IFRS compared to GAAP reporting standards

1.1 Focus on investors

One of the significant advantages of IFRS compared to GAAP is its focus on investors in

the following ways:
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1. The first factor is that IFRS promise more accurate, timely and comprehensive financial statement

information that is relevant to the national standards. And the information provided by financial

statements prepared under IFRS tends to be more understandable for investors as they can

understand the financial statement without the necessity of other sources which makes investors

more informed2. This also helps new or small investors by making the reporting standards simpler and better

quality as it puts small and new investors in the same position with other professional investors as

it was impossible under the previous reporting standards. This also helps to reduce the risk for

new or small investors while trading as professional investors can not take advantage due to the

simple to understand nature of financial statements.

3. Due to harmonization and standardization of reporting standards under IFRS, the investors do not

need to pay for processing and adjusting the financial statements to be able to understand them,

thus eliminating the fees of analysts. Therefore, IFRS reduces the cost for investors.

4. Reducing international differences in reporting standards by applying IFRS, in a sense removes across border takeovers and acquisitions by investors.

Based on information mentioned above, it can be assumed that because higher information

quality reduces both the risk to investors from buying and owning shares and the risk to less

informed investors due to wrong selection due to lack of understanding, it should lead to

reduction in firms cost of equity capital.

This on one hand should increase the share prices, and on the other should make new

investments by firms more attractive.

Moreover, the following points mark additional advantages of IFRS compared to GAAP

1.2 Loss recognition timeliness

Recognising the loss immediately is one of the key features of IFRS as it is not only thebenefit for the investors, but also for the lender and other stakeholders within the company.

The increased transparency and loss recognition of IFRS, usually increases the efficiency of

contracting between companies and their management, which also enhances the corporate

governance.


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With increased transparency as promised by IFRS, the lenders also benefit from IFRS as it

makes it compulsory for the companies recognize the loss immediately.

This timelier loss recognition of IFRS, triggers the

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