Question

What are International Financial Reporting Standards? What benefits do they bring to the global financial community?

Answer 1

Answer-

International Financial Reporting Standards ( IFRS)

IFRS are accounting standards that are framed by  International Accounting Standards Board (IASB).

The components of financial statements under IFRS.

1) The set of finanacial statements are prepared in compliance with IFRS

The Balance sheet is a statement of financial position as at the end of the period.
The profit and loss statement and other comprehensive income include those items of income or expense that are not recognized in the profit and loss
The changes in equity is the reconciliation between amounts at the beginning and the end of the year.
Statement of cash flow
Notes to the financial statements includes a summary of significant accounting policies.

The benefits of IFRS are

1) The companies reporting in IFRS are in compliance with global standards and can raise capital in global markets other than the domestic markets
2) Most of the countries reporting in IFRS would save the costs of restatement into local standards.
3) Consolidation of statements is easier in IFRS.
4) Improves quality of reporting and transperency in financal statements.
5) IFRS is being adopted by many countries and it will help in M&A activities across borders without any hassles.
6) IFRS are opening avenues for many learned professionals to deal with internatioal clients with ease.