Fundamental Concepts of IFRS †Free Samples to Students

Question: Discuss about the Fundamental Concepts of IFRS. Answer: Introduction: In the year 2004, July, AASB enacted Australian equivalents to International Accounting standards board. Subsequently, this act was by a financial reporting council strategic direction (Bauer, O'Brien Saeed, 2014). In relation, the concept of Australian equivalents to IASB standards achieve what is considered as the FRCs directive pointing out at ensuring profit entities conform to standards set by AASB for reporting periods traceable after January 2005 to also comply with the IASB standards. Consequently, the AASB continues to maintain correspondence with the IASBs set standards to ensure that the strategic directive enacted by the FRCs is met. Generally, the approach adopted by the AABS ensures that it also adopts the content and wording of the IASB standards. When there is the need to legalize an Australian legislative environment, wordings may be changed. A comprehensive example includes the Australian application paragraph that accommodates the Corporations Acts in 2001. The changes, however, did not influence the element level of the requirements. In this case, the primary focus of the IASBs is more inclined towards for-profit entities. The AABS, on the other hand, is in charge of setting the standards of accounting for all of the types of reporting entities needed. Also, supplementary texts which are identified are contained within the AASB standards so as to deal with the cases where the need presents itself to have different or additional requirements for the non-profit entities (Budding, Grossi Tagesson, 2014). The additions however do not have a bearing on the requirements with particular regards to for-profit entities. In other cases, a not for profit firm that complies with the equivalents of Australia to the standards of IASB may never be in a position to concurrently be in compliance such standards of IASB since the supplementary necessities may unnecessarily be consistent with the IASB requirements (Barker et al, 2014). The principal focus of the AASB is also to aim for the highest quality financial reporting in its adoption of the IASB standards. To this end, the AASB exclusively permits only a few optional treatments available in the IASB standards. Also, the AASB in some instances requires additional disclosure; an example includes a case where the additional disclosure is already required under the IASB standards. In other cases also, the existing AASB standards comprise critical interpretation which is unincorporated in the corresponding standards of IASB. In this case, the AASB holds the interpretation as guide that is however not share of the standard in instances whereby it is said to b enefit the users of AASB standards. However, it should not dispute the equivalents of Australia content to the set standards of IASB. AASB incorporates such issues into the accounting of Australia through the commitment to development of public interest (Ordelheide, 2016). The AASB makes use of global accounting standards are embedded in transparent and corresponding information found in the financial statements. In order to exercise this objective, the body partners with others such as IASB so as to achieve convergence in accounting standards across the globe. International organization should first identify issue (technical) The IASB/IFRS recognizes a problem (technical) which is comprehensively analyzed by the two bodies. The degree of involvement in this case, with particular regards to AASB differs in accordance to respective issues hence can be either non-substantive/ substantive. The global public subdivision accounting standard board can further recognize such issues. AASB carefully monitors the work program by IPSASB as well as works on the selected topics. In relation, this is embedded on their general implication to the public sector especially in financial reporting in Australia. 2nd phrase- The AASB identifies and analyses the technical issue The Board members of AASB, as well as its staff, in this level identify a technical issue that may require consideration. Issues that are related to entities like for-profit are sent to either IFRIC or IASB for extensive review. Also, entities related to not-for-profit entities are addressed either domestically or are issued to the IPSASB section. An individual or Australian Organization identifies and dissects the technical issue The Australian stakeholders gives comprehensive advice the AASB on the issues they consider should be reviewed or changed. A comprehensive example includes issues that are highlighted in hopes of cultivating relevance and reliability concepts of financial info and also reduce cost of FR (financial reporting). There is the need for the development of proposal by the AASB. The proposals assessment comprises the possible paybacks of carrying out the project, resources available as well as the likely timing and the cost of undertaking the project (Picker et al, 2016). Consequently, the AASB reviews the project proposal as a whole and hence decide as whether the project and the changes made are sensible and whether it need the placement on review for corresponding work plan. In event that the board disputes the agenda, this decision is formally reported as a Board Agenda Decision in the name of rejection statements. Researching and considering the issue Immediately an issue is added to the agenda docket, AASB discusses the agenda through the papers previously worked on and presents them to its staff. Those papers typically address several crucial issues, the timing of outputs and alternative approaches. Arguments and counterarguments in this case are drawn from materials from counterpart standard setters such as the New Zealand Accounting Standard Board, the IPSASB and the IASB. Additionally, other issues are deliberated jointly with the help of the New Zealand Standard Board so as to develop comparable requirements. After the completion of the research, it is the duty of AASB to make available to the public documents for public comment as well as the discussions with the relevant stakeholders as a result of the use of the such documents as: ED is a document in which the proposed standard or an amendment to a drafted standard is highlighted. It entails polished proposals as compared to discussion papers Invitations, consultation papers and comments. ITCs- Invitations to Comments Invitation to comments primary aim is to seek feedback from stakeholders on comprehensive proposals. It contains both discussion and consultation papers. A draft analysis of a projected interpretation of a given standard and is very crucial. It usually highlights a variety of likely policies of accounting on identified topics. IPSASB, IASB, as well as other standard setters are the ones in charge of issuing discussion papers, consultation papers, and other similar documents. To this regard, AASB might opt to avail a global documents in the country for specific purposes of comments with an Australian preface added for the exclusive purpose of explaining the text. On the other hand, the methods used by AASB to engage its stakeholders include the following: Focus groups, roundtable discussions, interpretation advisory panel and project advisory panel. However, the methods are not limited to the listed ones. Outcomes from AABSs consideration can be classified as the assurance of such pronouncement as standard alongside conceptual framework (CF) document/interpretation. Pronouncement available to for-profits entities should be constant as well as consistent with the IFRS that is availed by the IASB. Subsequently, the primary ideology behind this is to make sure the general financial statements that not for profit firm prepare are certainly compliant with the standards set by AASB. Further, AASB maintains a transaction neutrality policy in which it controls similarity in each kind of organization. However, there is exclusion of special cases where there is a wide-ranging reason to be different. AASB is in charge of making formal submissions on documents issued. Also, comments by the two respective bodies, that is IPSASB and the IASB directly contributes and influences the adoption of global quality standards of accounting. Obtaining Comments from the relevant stakeholders Formal comment letters are used to obtain requests and comment suggestions from the relevant stakeholders. Also, other inputs from the key stakeholders on AASBs personal proposal about the various documents previously issued are examined. In relation, AABS examines this involvement while submitting to institutions like IPSASB or IASB besides in the pronouncement development. Compliance and Implementation are the last phrase in this technical process. The changes implemented are adopted and monitored by the relevant organizations. AASB is in charge of monitoring the implementation of accounting standards in Australia. Technically, revisions made to domestic AASB or submissions to IASB or proposed changes to international standards are also foreseen by the same bodies. In addition, compliance with the accounting standards is technically monitored by institutions like: Institute of Public Accountants (IPA) Australian Prudential Regulation Authority (APRA) CPA Australia (CPAA) References Barker, R., Lennard, A., Nobes, C., Trombetta, M., Walton, P. (2014). Response of the EAA financial reporting standards committee to the IASB discussion paper A review of the conceptual framework for financial reporting.Accounting in Europe,11(2), 149-184. Bauer, A. M., O'Brien, P. C., Saeed, U. (2014). Reliability makes accounting relevant: a comment on the IASB Conceptual Framework project.Accounting in Europe,11(2), 211-217. Budding, T., Grossi, G., Tagesson, T. (2014).Public sector accounting. Routledge. Gebhardt, G., Mora, A., Wagenhofer, A. (2014). Revisiting the fundamental concepts of IFRS.Abacus,50(1), 107-116. Junior, R. M., Best, P. J., Cotter, J. (2014). Sustainability reporting and assurance: A historical analysis on a world-wide phenomenon.Journal of Business Ethics,120(1), 1-11. Ordelheide, D. (2016).Transnational accounting. Springer. Picker, R., Clark, K., Dunn, J., Kolitz, D., Livne, G., Loftus, J., Van der Tas, L. (2016).Applying international financial reporting standards. John Wiley Sons.