Accounting Regulation
Abstract
The Financial Reporting Council decided in 2002 that Australian would move to International Financial Reporting Standards (IFRS) in 2005. Prior to that, Australia had its own standard-setting processes. The introduction of IFRS in Australia replaced the original accounting standards and brought several brand new standards. Until now, Australia was the first country with a tradition of its own standard-setting to implement international accounting standards for general purposes. Therefore, the adoption is unexpected and controversial. This essay mainly focuses on the negative side of this accounting standard conversion, which points out a number of potentially serious problems that should be considered when IFRS has been adopted since 2005. The analysis is basically separated into four sections: the cultural influence, cost increment, impacts on domestic companies and impacts on the accounting policies. According to the analysis, conclusion can be reached that the adoption of IFRS has a great influence on Australian economy.
Introduction
In 2002, the Financial Reporting Council (FRC) announced that Australia would adopt International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), for reporting periods commencing on or after 1 January 2005. The introduction of IFRS in Australia replaced the existing accounting standards in relation to the recognition and measurement of assets, liabilities, equity, revenue and expenses (Haswell& Langfield-Smith 2008, pp46-47). IFRS are currently used in many parts of the world, however, Australia was the first country with a tradition of its own standard-setting to embrace international accounting standards for general purposes, including financial reporting of single companies as well as consolidated reporting (Haswell& Langfield-Smith 2008, p46).The decision to move to an IFRS-based framework was quite controversial. This article mainly focuses on the defects of
The Financial Reporting Council decided in 2002 that Australian would move to International Financial Reporting Standards (IFRS) in 2005. Prior to that, Australia had its own standard-setting processes. The introduction of IFRS in Australia replaced the original accounting standards and brought several brand new standards. Until now, Australia was the first country with a tradition of its own standard-setting to implement international accounting standards for general purposes. Therefore, the adoption is unexpected and controversial. This essay mainly focuses on the negative side of this accounting standard conversion, which points out a number of potentially serious problems that should be considered when IFRS has been adopted since 2005. The analysis is basically separated into four sections: the cultural influence, cost increment, impacts on domestic companies and impacts on the accounting policies. According to the analysis, conclusion can be reached that the adoption of IFRS has a great influence on Australian economy.
Introduction
In 2002, the Financial Reporting Council (FRC) announced that Australia would adopt International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), for reporting periods commencing on or after 1 January 2005. The introduction of IFRS in Australia replaced the existing accounting standards in relation to the recognition and measurement of assets, liabilities, equity, revenue and expenses (Haswell& Langfield-Smith 2008, pp46-47). IFRS are currently used in many parts of the world, however, Australia was the first country with a tradition of its own standard-setting to embrace international accounting standards for general purposes, including financial reporting of single companies as well as consolidated reporting (Haswell& Langfield-Smith 2008, p46).The decision to move to an IFRS-based framework was quite controversial. This article mainly focuses on the defects of