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Author: Michele Bertoni
Publisher:
ISBN:
Category :
Languages : en
Pages : 11
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Book Description
In 2006 the International Accounting Standards Board (IASB) issued a draft version of the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs), marking an important milestone in the process of accounting harmonization. It is a sign, in fact, that the effects of globalization have reached not only large companies, but also small and medium entities. Many SMEs are already characterized by a high level of internationalization, being greatly influenced by external and international factors. Their reporting framework, however, is strictly rooted in country-specific regulations, and the attempts of harmonizing reporting rules for SMEs within the EU pale in comparison to the results obtained for the financial statements of listed companies. However, there is a need for transparency and comparability in financial reporting for SMEs too, given also the important role played by small and medium-sized entities in most European economies. For example, the presence of SMEs in the Italian context is so important that, in the past, some authors have considered the "dwarfism" of the Italian companies to be an economic advantage. In this paper, we consider the implications of the prospective application of IFRS by European SMEs, highlighting the pros and cons of introducing a differential reporting system for this category of firms. The complications that will be probably introduced in the existing regulatory framework with the adoption of IFRS for SMEs are analyzed, placing an emphasis on the function played by the financial statements of unlisted companies. We argue that the coexistence of a two or even three-tiered structure of accounting regulation could lead to confusion in the users and could also increase the costs of financial reporting for the preparers. Finally, we comment on the decision of the IASB, instead of incorporating specific application criteria in the new standards, to let the single States that are going to implement them to establish the qualitative and quantitative criteria that need to be fulfilled in order to apply the IFRS for SMEs.
Author: Michele Bertoni
Publisher:
ISBN:
Category :
Languages : en
Pages : 11
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Book Description
In 2006 the International Accounting Standards Board (IASB) issued a draft version of the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs), marking an important milestone in the process of accounting harmonization. It is a sign, in fact, that the effects of globalization have reached not only large companies, but also small and medium entities. Many SMEs are already characterized by a high level of internationalization, being greatly influenced by external and international factors. Their reporting framework, however, is strictly rooted in country-specific regulations, and the attempts of harmonizing reporting rules for SMEs within the EU pale in comparison to the results obtained for the financial statements of listed companies. However, there is a need for transparency and comparability in financial reporting for SMEs too, given also the important role played by small and medium-sized entities in most European economies. For example, the presence of SMEs in the Italian context is so important that, in the past, some authors have considered the "dwarfism" of the Italian companies to be an economic advantage. In this paper, we consider the implications of the prospective application of IFRS by European SMEs, highlighting the pros and cons of introducing a differential reporting system for this category of firms. The complications that will be probably introduced in the existing regulatory framework with the adoption of IFRS for SMEs are analyzed, placing an emphasis on the function played by the financial statements of unlisted companies. We argue that the coexistence of a two or even three-tiered structure of accounting regulation could lead to confusion in the users and could also increase the costs of financial reporting for the preparers. Finally, we comment on the decision of the IASB, instead of incorporating specific application criteria in the new standards, to let the single States that are going to implement them to establish the qualitative and quantitative criteria that need to be fulfilled in order to apply the IFRS for SMEs.
Author: Marvin Müller
Publisher: GRIN Verlag
ISBN: 3668138052
Category : Business & Economics
Languages : en
Pages : 25
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Book Description
Seminar paper from the year 2016 in the subject Business economics - Accounting and Taxes, grade: 81%, University of South Wales, language: English, abstract: The report aims to analyse the opportunities, negative impacts and limitations of adopting IFRS for German SMEs. At first, a classification of SMEs in Germany is given and their current situation is demonstrated. The next passage critically analyses the impact of an introduction of IFRS for SMEs in Germany. The analysis includes investigating if the effect varies in different crucial business factors of SMEs as well as their company type. At last, the results are summarised and recommendations are given.
Author: Dr. Ashad ullah Qureshi
Publisher: Concepts Books Publication
ISBN:
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
U.S. private entities considering adoption of International Standards for Small- and Medium-sized Entities (IFRS for SMEs) need to understand how the new standards will modify financial reporting. However, there has been no determination of the significance of the financial statement impact of changing from United States Generally Accepted Accounting Principles (U.S. GAAP) to IFRS for SMEs. Without this knowledge, private entities in the United States will not be able to make an informed decision as to the benefits or consequences of adopting IFRS for SMEs. Based on stakeholder theory, this study sought to determine how adoption of IFRS for SMEs would affect the financial reporting of U.S. private entities. Using identified reporting differences between the 2 sets of standards, hypothetical 2010 IFRS for SMEs’ financial statements were prepared for 3 participating entities. Analysis of variation between the hypothetical IFRS for SMEs’ financial statements and the original U.S. GAAP financial statements provided a means to determine the financial reporting impact of IFRS for SMEs’ adoption. In each of the 3 case studies, adoption of IFRS for SMEs did not significantly influence the financial reporting of U.S private entities, indicating that the communication of financial information would be fundamentally the same using the simplified IFRS for SMEs or the more complex U.S. GAAP. The results of this study suggest that IFRS for SMEs should be considered an acceptable set of standards for the preparation of quality financial statements by U.S. private entities. This study positively contributes to social change by providing new knowledge to assist private companies in the evaluation of the adoption of IFRS for SMEs; such knowledge could, in turn, reduce financial reporting costs and improve the SMEs’ economic conditions.
Author: Mourad Mroua
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The objective of this paper is to analyze the cultural, economic and legal factors through the international accounting standard 'IFRS for SMEs' adoption for the Small and Medium- sized Entities. Based on a sample of 82 countries be they adopters and non-adopters of IFRS for SMEs, the results show a positive and significant effect of the Strength Investor Protection, power distance, and legal environment as well as a negative and significant effect of individualism, uncertainty, avoidance, and foreign market size on the IFRS adoption decision for the SMEs case. Nevertheless, masculinity, regulations of securities exchanges, efficacy corporate boards, strength audit and reporting standards reveal insignificant effect on the IFRS adoption decision. Our findings have implications on revising the IFRS for SMEs and will assist in addressing future complications in the IFRS _SMEs adoption decision process by considering cultural dimensions, economic, and legal factors affecting the decision. Besides, our results allow investors to have an idea about the specific environmental characteristics of the countries that have adopted the "IFRS_SME"
Author: Ulf Brüggemann
Publisher: Springer Science & Business Media
ISBN: 3834969524
Category : Business & Economics
Languages : en
Pages : 162
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Book Description
Ulf Brüggemann discusses and empirically investigates the economic consequences of mandatory switch to IFRS. He provides evidence that cross-border investments by individual investors increased following the introduction of IFRS.
Author: Alexander Schiebel
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In its proposed IFRS for Small and Medium-sized Entities (February 2007), the International Accounting Standards Board (IASB) proposes that entities without public accountability, which the IASB calls small and medium-sized entities (SMEs) should be accounted for differently to publicly accountable entities (stock exchange listed companies and entities managing assets in a fiduciary capacity for a broad range of outsiders). External users of the financial statements of SMEs are said to have different information needs. To the extent that the information needs of external users of financial tatements are different depending on whether entities are publicly accountable or not, the regulations governing international financial reporting should also be different. Global financial reporting standards for SMEs would make comparison across borders possible. The IASB's objective is an independent IFRS for SMEs. Therefore the draft standard's dependence, among other things, on the full IFRS system affects the quality of the differential financial reporting model. The aim of this paper is to analyse the extent to which the draft standard is dependent on the full IFRS system. Recommendations to avoid any dependence are presented. No attempt is made in this paper to analyse the different information needs suggested by the IASB or the IASB's stated objective of an independent reporting standard for SMEs.
Author: Joachim Gassen
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
I investigate how the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) contributes to the development of private firm financial reporting. I interview a sample of leading accounting experts from 24 jurisdictions around the globe to understand the role of private firm financial reporting and financial transparency in their jurisdiction as well as the importance of IFRS for SMEs. I find significant variation across jurisdictions in my sample and document that IFRS for SMEs predominantly influenced private firm financial reporting and transparency by serving as a blueprint for national regulatory reforms. In some jurisdictions, IFRS for SMEs has also been adopted as an optional reporting framework. Direct firm-level adoption of IFRS for SMEs has been low in these jurisdictions with the exception of South Africa where it seems to be used relatively widely. Based on my response data, I suggest some potential rationales for my findings and discuss potential reasons for the observed cross-jurisdiction variation in private firm financial transparency and IFRS for SMEs adoption.
Author: Luzi Hail
Publisher:
ISBN:
Category :
Languages : en
Pages : 104
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Book Description
Drawing on the academic literature in accounting, finance and economics, we analyze economic and policy factors related to the potential adoption of International Financial Reporting Standards (IFRS) in the U.S. We highlight the unique institutional features of U.S. markets to assess the potential impact of IFRS adoption on the quality and comparability of U.S. reporting practices, the ensuing capital market effects, and the potential costs of switching from U.S. GAAP to IFRS. We discuss the compatibility of IFRS with the current U.S. regulatory and legal environment as well as the possible effects of IFRS adoption on the U.S. economy as a whole. We also consider how a switch to IFRS may affect worldwide competition among accounting standards and standard setters, and discuss the political ramifications of such a decision on the standard setting process and on the governance structure of the International Accounting Standards Board. Our analysis shows that the decision to adopt IFRS mainly involves a cost-benefit tradeoff between (1) recurring, albeit modest, comparability benefits for investors, (2) recurring future cost savings that will largely accrue to multinational companies, and (3) one-time transition costs borne by all firms and the U.S. economy as a whole, including those from adjustments to U.S. institutions. We conclude by outlining several possible scenarios for the future of U.S. accounting standards, ranging from maintaining U.S. GAAP, letting firms decide whether and when to adopt IFRS, to the creation of a competing U.S. GAAP-based set of global accounting standards that could serve as an alternative to IFRS.
Author: Didier Bensadon
Publisher: Springer
ISBN: 3319282255
Category : Business & Economics
Languages : en
Pages : 477
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Book Description
This book, dedicated to Prof. Jacques Richard, is about the economic, political, social and even environmental consequences of setting accounting standards, with emphasis on those that are alleged to be precipitated by the adoption and implementation of IFRS. The authors offer their reasoned critiques of the effectiveness of IFRS in promoting genuine global comparability of financial reporting. The editors of this collection have invited authors from 17 countries, so that a great variety of accounting, auditing and regulatory cultures, and educational perspectives, is amply on display in their essays.
Author: Nick Antill
Publisher: Harriman House Limited
ISBN: 0857197770
Category : Business & Economics
Languages : en
Pages : 286
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Book Description
Revised and updated. The influence of International Financial Reporting Standards (IFRS) on accounting across the world is stronger than ever. Most importantly, this stems from the mandatory adoption of IFRSs in many parts of the world, including Europe, Canada, Australia, Brazil and, with some relatively small exceptions, China. Additionally, foreign registrants in the US are also permitted to use IFRS by the SEC. The impact of IFRSs also extends to accounting developments as the IASB and the FASB work closely together to formulate new standards such as those recently issued on leasing and revenue recognition. It is clear that investors, analysts and valuers need to understand financial statements produced under IFRS to feed in to their valuations and broader investment decisions. Written by practitioners for practitioners, the book addresses valuation from the viewpoint of the analyst, the investor and the corporate acquirer. It starts with valuation theory: what is to be discounted and at what discount rate? It explains the connection between standard methodologies based on free cash flow and on return on capital. And it emphasizes that, whichever method is used, accurate interpretation of accounting information is critical to the production of sensible valuations. The authors argue that forecasts of cash flows imply views on profits and balance sheets, and that non-cash items contain useful information about future cash flows - so profits matter. The book addresses the implications for analysis, modelling and valuation of key aspects of IFRS, all updated for recent developments, including: - Pensions - Stock options - Derivatives - Provisions - Leases - Revenue recognition - Foreign currency The text also sets out the key differences between IFRS and US GAAP treatments of these issues, in addition to their implications for analysis. A detailed case study is used to provide a step-by-step valuation of an industrial company using both free cash flow and economic profit methodologies. The authors then address a range of common valuation problems, including cyclical or immature companies, as well as the specialist accounting and modelling knowledge required for regulated utilities, resource extraction companies, banks, insurance companies, real estate companies and technology companies. Accounting for mergers and disposals is first explained and then illustrated with a detailed potential acquisition.
