Question

What do the IAS’s state in regard to report prepared for GPFRU’s?

Answer 1

IAS suggests for International Accounting Standards, issued by the International Accounting Standards Board (IASB). These standards are older now has been replaced by IFRS, International Financial Reporting Statndards.

IASB set various standards to make Financial statements more trasparent and comparable. The prime objective of IAS to provide transparacy, accountability ,efficiency in the financial statements. There are guidelines for external auditors to examine that accounts are prepared in accordance with those standards. for eg:-

IAS-1- Disclosure of Accounting policies ,presentation of financial statement.

This standard talk that the policies should be documented. It asks to disclose certain event which can impact on the health of organization as well as to investors. for eg:-there is legal dispute ongoing against the company in court. it must be disclosed in fianancial reports.

IAS-2 deals with the valuation of inventories.

Like wise there are 41 IAS's developed by IASB.

Thus, these standard help auditors in terms of valuation and disclosure of financial information. External auditor certify that IAS have followed properly, thus the users of financial statemnets can put reliance on the financial statements.

GPFRU suggest General Purpose Financial Report Users. They are basically:-

1. Banks- They need to evaluate the credibility, solvency check while sanctioning any funds/ loan to the organization.

2. Investors- they need to evaluate profit earning capacity as they are concerned with the dividend. IAS 33 talks about valuation of shares( Earning per share)

3. Regulating authorities- They need to check all the laws, regulations have been followed by organization.

In nutshell, we can say that IAS enhance the efficiency of financial statements and help GPFRU's in evaluating Financial Statement.