An Executive Guide to IFRS E-Book

Peter Walton

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 339

Veröffentlichungsjahr: 2011

Beschreibung

"A comprehensive and invaluable guide to IFRS which users will find indispensable in correctly applying the complex and onerous requirements of IFRS and IAS." Steve Collings FMAAT FCCA, Leavitt Walmsley Associates and author of Interpretation and Application of International Standards on Auditing International Financial Reporting Standards have been mandatory in the EU since 2005 and are rapidly being adopted by countries throughout the world. In this environment it is increasingly important for managers, executives and CEOs to understand the background of the IFRS and their main requirements. In An Executive Guide to IFRS: Content, Costs and Benefits to Business, Peter Walton provides a concise and accessible guide to the principal features of IFRS, explains why they are useful, looks at their impact on businesses, and provides some of the context to help define their global role. The book is divided into three sections. Part one deals with the convergence process and its costs and benefits, and gives background on the story so far. Part two contains the main technical content of the book and provides an analysis of the main issues under IFRS reporting, including: * The content of financial statements * Investments in other companies * Income Statement and Balance Sheet items * IFRS for SMEs * A comparison with US GAAP Part three covers the creation of the IFRS, provides details of the IASB's standard-setting process, and describes how people outside the IASB can participate in the process and lobby effectively. It also examines the history of the IASB, and includes a chapter based on the author's observation of the standard setters in action. An Executive Guide to IFRS is an invaluable resource for anyone seeking to understand the essentials of International Financial Reporting Standards.

Leseprobe

Contents

Cover

Half Title page

Title page

Copyright page

Preface

Acknowledgements

About the Author

Chapter 1: Worldwide convergence on IFRS

Convergence

Large company advantages

Why governments support IFRS

The use of IAS/IFRS in the world

Problems with convergence

Modified convergence

Small and medium-sized business

Conclusion

Chapter 2: Content of financial statements

IAS 1 presentation of financial statements

Statement of Comprehensive Income

Statement of Financial Position

Statement of Cash Flows

Statement of Changes in Equity

Accounting policies and changes

Fair presentation

Conventions

Interim financial statements

Conclusion

Appendix: The IASB Conceptual Framework

Chapter 3: Investments in other companies

Consolidation

Translation of foreign subsidiaries

Business combinations

Investments in associates

Joint ventures

Assets held for disposal

Equity investments

Conclusion

Appendix: Fair value measurement

Chapter 4: Income statement items

Revenue recognition

Agriculture

Government grants

Pensions

Stock options

Inventories

Income taxes

Interest expense

Foreign exchange differences

Accounting in hyperinflationary economies

Conclusion

Chapter 5: Balance sheet items

Property, plant and equipment

Investment property

Leased assets

Intangible assets

Mineral rights

Impairment

Assets held for sale

Financial instruments

Disclosures about financial instruments

Defining equity

Liabilities

Contingent liabilities

Chapter 6: Other significant standards

First time adoption

Related party transactions

Segment reporting

Concessions

Events after balance sheet date

Insurance

Chapter 7: The IFRS for SMEs

Development of the standard

Content

Conclusion

Chapter 8: Comparison with US GAAP

Conceptual Framework

Consolidation

Financial instruments

Offsetting

Non-financial assets

Impairment

Miscellaneous

Conclusion

Chapter 9: The IASB’s standard-setting process

Due process

Discussion paper

Exposure draft

New standard

Interpretations

Structure

Finance

Lobbying the IASB

Monitoring the IASB

Conclusion

Chapter 10: History of the IASB

The start-up phase

Steady progress

The enhancement phase

Transition

Global convergence

Relations with the US

Relations with Europe

The financial crisis

Conclusion

Chapter 11: Observer notes

Standard-setters are people

What sort of people?

What do they think?

Fair value controversies

Executory contracts

True and fair view

Anti-abuse measures

Conclusions

Further reading

Index

AN EXECUTIVE GUIDE TO IFRS

This edition first published 2011

© 2011 John Wiley & Sons, Ltd

All material and quotes from the IFRS are copyright © 2011 IFRS Foundation. All rights reserved. No permission granted to reproduce or distribute.

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Library of Congress Cataloging-in-Publication Data Walton, Peter J. An executive guide to IFRS : content, costs and benefits to business / Peter Walton.p. cm. Includes bibliographical references and index. ISBN 978-0-470-66490-2 (pbk.) 1. Financial statements—Standards. 2. International business enterprises—Accounting—Standards. 3. International financial reporting standards. I. Title. HF5626W35 2011 657’.30218—dc22

2011007568

A catalogue record for this book is available from the British Library.

ISBN 978-0-470-66490-2 (paperback), ISBN 978-1-119-97447-5 (ebk),

ISBN 978-1-119-97385-0 (ebk), ISBN 978-1-119-97386-7 (ebk)

PREFACE

This book is intended to be an easily accessible guide to the particularities of International Financial Reporting Standards (IFRS). The reader I had in mind is the accountant, the analyst, the financial executive or indeed the student of accounting, who is familiar with one or other form of national Generally Accepted Accounting Principles (GAAP) and wishes to familiarize themselves with IFRS for whatever reason. The book will not therefore teach you basic accounting nor tell you how to prepare financial statements under IFRS, but it will present as clearly as possible the main particularities that you should be aware of.

My initial training was in UK GAAP but I have since worked with US GAAP, French GAAP and Swiss GAAP as well as IFRS, and the choice of issues to highlight is informed by that background. I have spent many, many days listening to the IASB at work as an observer in the public gallery since April 2001, and I have tried to bring a flavour of the insights gained from that experience.

I should add the regular disclaimer that books like this are general in nature and are not a substitute for dedicated professional advice. If you would like to contact me, I can be reached at [email protected]. Suggestions for improvements are always welcome.

ACKNOWLEDGEMENTS

I am grateful to Jenny McCall, the commissioning editor, for her interest in the project and her support. I should also like to thank Gemma Valler, Amy Webster and their colleagues at John Wiley & Sons for their input in bringing the book to the market.

I should like to thank the Trustees of the IFRS Foundation for permission to cite extracts from IFRS and related literature. I should also like to express my appreciation of the generally sociable and helpful attitude of IASB members and staff during the many days I have spent observing them at work in the Cannon Street offices and elsewhere.

I should like to thank Steve Collings of Leavitt Walmsley Associates for his helpful comments on the first draft of this book. I am also grateful to Philippe Danjou (IASB) for comments on the last chapter. I, of course, remain responsible for errors.

ABOUT THE AUTHOR

Peter Walton has worked as an accountant with British and French multinationals and been finance director of a listed company. He subsequently moved to journalism, research and teaching. He researched a PhD at the London School of Economics and has taught at universities in the UK, US, Switzerland and France. He is chairman of the European Accounting Association’s Financial Reporting Standards Committee, which coordinates the EAA’s inputs to IFRS.

Peter is currently a Professor of Accounting at ESSEC Business School, Paris, where he is IFRS Director of the ESSEC-KPMG Financial Reporting Centre. He edits IFRS Monitor, a monthly report of the proceedings of the IASB, which is used by auditing firms, standard-setters and companies (www.ifrsmonitor.com). He also edits World Accounting Report, a monthly bulletin on international financial reporting.

CHAPTER 1

WORLDWIDE CONVERGENCE ON IFRS

This chapter is introductory in nature. It explains the origins of the use of IFRS for multinational companies and the notion of convergence. It reviews the progress of convergence and the case for and against use of a single comprehensive basis of accounting in the international capital markets.

In this century, financial reporting by large companies has undergone a transformation. In 2000 there was a picture of global diversity with each multinational mostly using the accounting rules of the country where it maintained its head office and (usually) primary stock exchange listing, with US principles dominant where a choice was available. By 2010 the world had changed to one where many of the top international companies use international rules: International Financial Reporting Standards, or IFRS.

The main aim of this book is to introduce to you the principal features of IFRS and provide some of the context to help explain the role of IFRS in the world. It will also tell you how IFRS are formulated and how you can influence that process and be part of it if you wish. The first chapter looks at the convergence process and tells you the story so far. The following section is the main technical content of the book – an analysis of the main issues under IFRS reporting. This includes a chapter devoted to the . The final section tells you about how IFRS are created and gives you some of the historical background, as well as some comments on the fundamental thinking behind IFRS.