Accounting Theory- Assignment
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Added on 2019-12-28
Accounting Theory- Assignment
Added on 2019-12-28
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ACCOUNTING THEORY
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................31 Overview of current discussion................................................................................................32 Rationale for current discussion and why projects of convergence of standards areundertaken....................................................................................................................................4TASK 2............................................................................................................................................5(3) IFRS and public departments.................................................................................................5(4) IASB and public interest........................................................................................................6(5) Do you think that IFRS must be adopted by the Australian local authorities?......................7CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
INTRODUCTIONAccounting is a vast domain and with passage of time many changes come in same. Incurrent time period all nations of the world are focusing on the convergence of the accountingstandards. This is because if international accounting standards will be implemented at globallevel better comparison of financial statements will be made. In the report, application of IFRSon government departments is discussed in detail. Factors due to which convergence is done inIFRS are also discussed briefly. At end of the report, the extent to which IFRS is in publicinterest is explained in detail1 Overview of current discussionConvergence of accounting standard refers to the objective under which main target is todevelop single set of accounting standards that can be used globally by all the business firms.Currently, each nation have its own accounting standards and same are followed for preparingfinancial statements. However, there are international accounting and reporting standards that arealso followed by large number of nations across the globe. From long time demand is raised inrespect to evolving a common accounting standards that will be followed across the nations toprepare financial statements (Armstrong and et.al., 2010). In past few years, number of effortsare made in respect to convergence of accounting standards at international level. USA currentlyis working with the International accounting standard board (IASB) to converge its GAAP(Generally accepted accounting standards). There are number of factors due to which nations likeUSA and Australia are focusing on converging there accounting standards with same of othernations or with IASB. There is a common consensus among the nations that if accountingstandards will be converged then it will be very easy to make comparison of the firm’s financialstatements. In current time period each nation have its own accounting standards. Hence, eachnation firm record book value of accounting items in different manner. Due to this reason itbecome very difficult to make comparison between varied firm’s financial statements.It is well known fact that financial statements are greatly used by the investors andmanagers to make business decisions (Kieso, Weygandt and Warfield, 2010). It is well knownfact that in current time period investors are not making investment in securities within theirnation boundary. They are making investment in securities in the foreign nations also. Formaking decisions they require firms financial statements. If the accounting standards of the
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