Frequently asked questions (FAQ) on IFRS!
Introduction:
Accounting
is the backbone of the business financial world. The aim of financial reporting
is to understand the business through the numbers and facts. Worldwide
accounting practice was highly diverse and meaningfully comparing financial
statements of entities located in different countries was very difficult.
Considering the increasing trend of globalisation across the world,
harmonisation in the accounting was necessary.
International
Financial Reporting Standards, commonly called IFRS, are accounting standards
issued by the IFRS Foundation and the International Accounting Standards Board.
In simple words IFRS are a set of accounting rules for how information
should be gathered and presented in financial reports.
They
constitute a standardised way of describing the company's financial performance
and position so that company financial statements are understandable and
comparable across international boundaries. They are particularly relevant
for companies with shares or securities publicly listed.
Why (IFRS) International Financial Reporting Standards:
- Accounting & financial reporting is vital for economies to grow and prosper.
- With the globalisation, difficulty in undertaking cross border transactions, due to difficulty in understanding financial statements of other entity.
- To bring harmony in the accounting language, there was need of reliable, transparent and can be comparable reporting framework.
- Considering this need. IASB and its predecessor organisation IASB introduced a set of high-quality reporting standards which are comparable across the globe, called IFRS.
For more details, watch the video at the provided
link: https://youtu.be/vV_Ga6DpJBc
How are IFRS standards developed?
IFRS Accounting
Standards are developed through a formal system of due process and broad
international consultation involving accountants, financial analysts and other
users and regulatory bodies from around the world.
The overall agenda of
the IASB will initially be set by discussion with the IFRS Advisory Council.
The process for developing an individual standard would involve the following
steps:
STEP 1:
During the early stages of a project, the IASB may establish an Advisory Committee to give advice on issues arising in the project. Consultation with the Advisory Committee and the IFRS Advisory Council occurs throughout the project.STEP 2:
IASB may develop and publish Discussion Papers for the public comment.Following the receipt and review of comments, the IASB would develop and publish an Exposure Draft for public comment.
STEP 4:
Following the receipt and review of comments, the IASB would issue a final IFRS Accounting Standard.
The
period of exposure for public comment is normally 120 days. However, in
exceptional circumstances, proposals may be issued with a comment period of 30
days. Draft IFRS interpretations are normally exposed for a 90-day comment
period.
Is IFRS mandatory for financial
reporting in India?
Can private companies or small companies use IFRS?
What is the salary range for professionals with IFRS expertise?
Salaries vary by country, experience, and role, but typically:
- Entry-level positions (1-3 years of experience): INR 3 lakhs to 6 lakhs per year.
- Mid-level positions (4-8 years of experience): INR 7 lakhs to 15 lakhs per year.
- Senior positions (8+ years of experience, such as CFOs or IFRS consultants): INR 15 lakhs onwards.
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