ACCY200 ESSAY
Table of Contents
1. Abstract 1
2. Introduction 2
3. Body 3
4. Conclusion 4
5. Reference List 5
Abstract
In general, International Financial Reporting Standards (IFRSs) promotes uniformity, understandable, enforceable and globally accepted international financial reporting standards. It would be important to find out more concerning IFRSs. The essay centres on the pros and cons of adoption of IFRSs by the Australian and Malaysian companies. Unfortunately, my findings conclude that disadvantages carry more weight than the advantages. Australia benefited in attribute of comparability and reduction in cost of capital but lose out on the aspect of cost of implementation, difficulties in familiarising the standards and the burden of increasing liabilities, reducing earning and equity of the company. On the other hand, speaking of Malaysia companies, however, they are moving into low transparency as Malaysia is still in the early stages of adopting IFRSs. Nevertheless, practising IFRSs enhances comparability for Malaysian companies.
Introduction
Today, in this contemporary society, almost all the countries around the globe are exposed and adopting the International Financial Reporting Standards (IFRSs) in computing their annual financial report, even Australia and Malaysia itself. IFRSs was originated and developed by the International Accounting Standards Board (IASB) in the year 2001 and it was established as the successor organisation to the International Standards Committee (IASC) which was formed during the year 1973. IASB was chaired by Sir David Tweedie. (IFRS , 2014) In precise, the “primary mandate of the IASB is to promulgate IFRSs”. (Paul & Burks, 2010, p2) As a matter of fact, “Australian companies complying with Australian Accounting Standards (AASB) had adopted IFRSs for application entities reporting under Corporations Act 2001 beginning on or after 1 January 2005”. (Australia Accounting Standard Board, 2014)
Adoption of IFRS is to ensure that
1. Abstract 1
2. Introduction 2
3. Body 3
4. Conclusion 4
5. Reference List 5
Abstract
In general, International Financial Reporting Standards (IFRSs) promotes uniformity, understandable, enforceable and globally accepted international financial reporting standards. It would be important to find out more concerning IFRSs. The essay centres on the pros and cons of adoption of IFRSs by the Australian and Malaysian companies. Unfortunately, my findings conclude that disadvantages carry more weight than the advantages. Australia benefited in attribute of comparability and reduction in cost of capital but lose out on the aspect of cost of implementation, difficulties in familiarising the standards and the burden of increasing liabilities, reducing earning and equity of the company. On the other hand, speaking of Malaysia companies, however, they are moving into low transparency as Malaysia is still in the early stages of adopting IFRSs. Nevertheless, practising IFRSs enhances comparability for Malaysian companies.
Introduction
Today, in this contemporary society, almost all the countries around the globe are exposed and adopting the International Financial Reporting Standards (IFRSs) in computing their annual financial report, even Australia and Malaysia itself. IFRSs was originated and developed by the International Accounting Standards Board (IASB) in the year 2001 and it was established as the successor organisation to the International Standards Committee (IASC) which was formed during the year 1973. IASB was chaired by Sir David Tweedie. (IFRS , 2014) In precise, the “primary mandate of the IASB is to promulgate IFRSs”. (Paul & Burks, 2010, p2) As a matter of fact, “Australian companies complying with Australian Accounting Standards (AASB) had adopted IFRSs for application entities reporting under Corporations Act 2001 beginning on or after 1 January 2005”. (Australia Accounting Standard Board, 2014)
Adoption of IFRS is to ensure that