WILEY IFRS:
PRACTICAL
IMPLEMENTATION
GUIDE AND
WORKBOOK
Made by:
Mahmoud Alqasem
CH 1:
INTRODUCTION TO
IFRS
Made by:
Mahmoud Alqasem
Contents: Introduction
to
▪ Introduction. IFRS
▪ Worldwide Adoption of IFRS.
▪ Remaining Exceptions.
▪ The IASC.
▪ The IASB.
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1 ST INTRODUCTION
International Accounting Standards ( IAS), now renamed
International Financial Reporting Standards ( IFRS), are
gaining acceptance worldwide.
This section discusses the extent to which IFRS are
recognized around the world and includes a brief overview
of the history and key elements of the international
standard-setting process.
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2 ND WORLDWIDE ADOPTION OF
IFRS
In the last few years, the international accounting
standard-setting process has been able to claim a number
of successes in achieving greater recognition and use of
IFRS.
In 2002 the European Union (EU) adopted legislation that
requires listed companies in Europe to apply IFRS in their
consolidated financial statements.
The legislation came into effect in 2005 and applies to
more than 8,000 companies in 30 countries, including
countries such as France, Germany, Italy, Spain, and the
United Kingdom.
The adoption of IFRS in Europe means that IFRS has
replaced national accounting standards and
requirements.
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2 ND WORLDWIDE ADOPTION OF
IFRS
The adoption of standards that require high-quality,
transparent, and comparable information is welcomed by
investors, creditors, financial analysts, and other users of
financial statements.
Without common standards, it is difficult to compare financial
information prepared by entities located in different par ts of
the world.
In an increasingly global economy, the use of a single set of
high-quality accounting standards it will lead to:
1. facilitates investment & economic decisions across borders
2. increases market efficiency.
3. reduces the cost of raising capital.
IFRS are increasingly becoming the set of globally accepted
accounting standards that meet the needs of the world’s
increasingly integrated global capital markets.
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3 RD REMAINING EXCEPTIONS
The most significant remaining exceptions to the global
recognition of IFRS are the United States (US) and Japan.
In these countries, entities continue to be required to
follow local accounting standards. However, IFRS are
increasing in importance also in these countries.
The International Accounting Standards Board (IASB) , the
body in charge of setting IFRS, works closely with the
national accounting standard -setting bodies in these
countries—the US Financial Accounting Standards Board
(FASB) and the Accounting Standards Board of Japan
(ASBJ)—to converge (that is, narrow the differences
between) local accounting standards and IFRS.
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4 TH THE IASC
From 1973 until 2001, the body in charge of setting the
international standards was the International Accounting
Standards Committee (IASC).
The IASC meant to encourage national accounting
standard setters around the world to improve and
harmonize national accounting standards.
The IASC objectives (as stated in its Constitution) were:
1. Formulate and publish accounting standards in the
public interest to be observed in the presentation of
financial statements and to promote their worldwide
acceptance and observance.
2. Work generally for the improvement and
harmonization of regulations, accounting standards,
and procedures relating to the presentation of
financial statements. 8
4 TH THE IASC
During its existence, IASC issued 41 numbered Standards,
known as International Accounting Standards (IAS), as
well as a Framework for the Preparation and Presentation
of Financial Statements.
While some of the Standards issued by the IASC have
been withdrawn, many are still in force.
In addition, some of the Interpretations issued by the
IASC’s interpretive body, the so -called Standing
Interpretations Committee (SIC), are still in force.
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5 TH THE IASB
In 2001, the IASC Board was replaced by the International
Accounting Standards Board (IASB) as the body in charge
of setting the international standards.
Fundamental changes were made to strengthen the
independence, legitimacy, and quality of the international
accounting standard-setting process.
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5 TH THE IASB
IASC IASB
▪ IASC was having a special ▪ IASB is governed by a group of
relationship with the international Trustees of diverse geographic and
accounting profession. functional backgrounds who are
independent of the accounting
profession.
▪ IASC’s members are representatives ▪ IASB’s members are individuals who
of specific national accountancy are appointed based on technical skill
bodies or other organizations. and background experience.
▪ IASC Board used to have meeting ▪ IASB Board usually meets each
about four times a year in London. month in London.
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5 TH THE IASB
The International Accounting Standards Committee Foundation
(“the IASC Foundation”) is the name of the organization that
comprises both the IASB and its Trustees.
The IASC Foundation objectives (as stated in its Constitution)
are:
A. To develop (in the public interest) a single set of high -quality,
understandable, and enforceable global accounting standards
that require high-quality, transparent, and comparable
information in financial statements and other financial
repor ting.
B. To promote the use and intensify application of those standards.
To achieve objectives (A) & (B):
C. It must consider the special needs of small and medium-sized
entities and emerging economies, as appropriate.
D. Achieving convergence between national accounting standards
and international financial repor ting standards with high -quality
solutions.
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5 TH THE IASB
At its first meeting in 2001:
➢ IASB adopted all outstanding IAS issued by the IASC as its
own Standards.
➢ Those IAS continue to be in force to the extent they are not
amended or withdrawn by the IASB.
➢ New Standards issued by IASB are known as IFRS.
➢ When referring collectively to IFRS, that term includes both
IAS and IFRS.
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5 TH THE IASB
List of IFRS:
► First: International Accounting Standards (IAS):
# Name
IAS 1 Presentation of Financial Statements
IAS 2 Inventory
IAS 7 Statement of Cash Flows
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10 Events After the Reporting Period
IAS 12 Income Taxes
IAS 16 Property, Plant and Equipment
IAS 19 Employee Benefits
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
IAS 21 The Effects of Changes in Foreign Exchange Rates
IAS 23 Borrowing Costs
IAS 24 Related Party Disclosures 14
5 TH THE IASB
List of IFRS:
► First: International Accounting Standards (IAS):
# Name
IAS 26 Accounting and Reporting by Retirement Benefit Plans
IAS 27 Separate Financial Statements
IAS 28 Investments in Associates and Joint Ventures
IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 32 Financial Instruments: Presentation
IAS 33 Earnings Per Share
IAS 34 Interim Financial Reporting
IAS 36 Impairment of Assets
IAS 37 Provisions, Contingent Liabilities and Contingent Assets
IAS 38 Intangible Assets
IAS 40 Investment Property
IAS 41 Agriculture 15
5 TH THE IASB
List of IFRS:
► Second: International Financial Reporting Standards (IFRS):
# Name
IFRS 1 First-time Adoption of International Financial Reporting Standards
IFRS 2 Share-based Payment
IFRS 3 Business Combinations
IFRS 4 Insurance Contracts (Will be superseded by IFRS 17 as of 1 January 2023)
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
IFRS 6 Exploration for and Evaluation of Mineral Resources
IFRS 7 Financial Instruments: Disclosures
IFRS 8 Operating Segments
IFRS 9 Financial Instruments
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities 16
5 TH THE IASB
List of IFRS:
► Second: International Financial Reporting Standards (IFRS):
# Name
IFRS 13 Fair Value Measurement
IFRS 14 Regulatory Deferral Accounts
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases
IFRS 17 Insurance Contracts
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5 TH THE IASB
IASB Structure
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The end of the
Chapter
Made by:
Mahmoud Alqasem 19
