Question

Briefly discussbthe following topic: INTERNATIONAL FINANCIAL REPORTING STANDARDS.

Answer 1

International Financial Reporting Standards are common rules or standards which are used in preparation and presentation of financial statements in an effective way. These standards are being issued by International Accounting Standards Board (IASB). The aim of such standards is to make sure that financial statements are consistent, transparent and comparable through out the world. Through IFRS a consistency in financial statements prepared worldwide can be seen, this allows users of financial statements to make sound financial decision. IFRS specifies about how the financial statements should be prepared and reported, it also lays down the the types of transactions and events that should form part of financial statement. IFRS aims to provide more safety to investors and other users of financial statements. The IFRS covers a wide range of accounting activities. IFRS set mandatory rule for various business practices, some of these are as follows:

• Statement of financial position
• Statement of comprehensive income
• Statement of changes in equity
• Statement of cash flow

The main benefit of such kind of standards is that it brings uniformity and consistency in books of accounts of different companies around the world. This makes financial statements easy to understand for users around the world. The IFRS are separate from International Accounting Standard.