International Financial Reporting Essay

1 INTRODUCTION

1.1. Accounting Standards: businesess that receive capital from investors and creditors are accountable to these capital providers. They are also accountable to others like to its employees,to the government where they operated and to the public at large. Thus businesses are responible to provide financial information to the interested people about the state of health of their respective companies. This financial information is based on some accounting rules and regulation and these rules and regulation are known as accounting standards.

1.2. Different Accounting Treatment for a Single Economic Event: Different countries are using different accounting starndards . Some countries may are using their own national accounting

Globalized Capital Markets and Internet World: Investors are searching for opportunities which bring sufficient return on thier investment and similarly busines enterprises are looking for capital at lowest price all our the world. On different stock exchanges there is a notable foreign investment. Security and forex markets are working corss boundaries and thus the capital is raising through out the world. A person can check any company status and can invest with the help of internet. Any person can buy and sell gold, silver and any curency online through forex trading service Similarly investors can buy shares of pepsi, coca cola, NASDAQ, Dow Jones and so on online from every where. In that case, investors will be interested to know about the financial health of that company in which he wants to invest and the financial health of any company will be well defined to the investors by a formate of single set of generally accepted accounting standards.

1.4. Single Set Of Accounting

This set of accounting standards is for the preparation of financial statements by business entities.it is a globally recongnised set of accounting standards. IFRS prescribe how to recognise, measure present and disclose income, liabilities, expense and assets in financial statements.

Convergence and adoption of IFRS.

The adoption of IFRS means the implimentation by country in the same manner the same accounting standards as issued by IASB. But convergece is a different term, convergence of IFRS means national accounting standard board of a country would work with IASB to develop a single set of accounting standard with the passage of time. Countris that agree on conversion of its national standards to international standards may not consistent in the acounting standards issued by the IASB in all manner, but still it is apreciated to have a common set of accounting standards and make possible the adoption in future.