Adoption of IFRS in ASEAN Countries

Running Head: FINANCIAL ACCOUNTING THEORY
FINANCIAL ACCOUNTING THEORY
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1FINANCIAL ACCOUNTING THEORY
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
IAS and IFRS Role in International Accounting Standard Developments............................2
Convergence of IFRS and Adoption in ASEAN....................................................................3
Differences in IFRS Implementation.....................................................................................6
Conclusions................................................................................................................................7
Reference....................................................................................................................................9

2FINANCIAL ACCOUNTING THEORY
Introduction
This assignment is prepared with the objective of discussing the perceived and
benefits for adopting International Accounting Standards in the Asian Countries. Adoption of
the International Financial reporting Standards sets out procedures, which have to be
followed by the companies in case of their IFRS adoption for the first time that is the basis
for general purpose financial statements preparation. Therefore, this report will discuss the
application of business practices broad knowledge in the diversified context. This report will
examines the perception of the professional accountants in Asian Countries as well as
association of the perceived benefits with International Financial Reporting Standards for
accounting and auditing professions in country where they practice. Moreover, this
assignment will discuss extent of adopting the standards of IFRS or IAS of the accounting
that are supported by the government, state and professionals of local accounting bodies
(Perera and Chand 2015).
Discussion
IAS and IFRS Role in International Accounting Standard Developments
As per Mahesh Joshi, the professionals in accounting in countries such as Singapore,
Indonesia and Malaysia have highly supported IFRS adoption, their opinions does not
significantly differ by the qualifications of professional, their experiences and their training
place. Moreover, the countries have been benefitted from global accounting standards
harmonization (Joshi, Yapa and Kraal 2015). As per Diane Kraal, benefits of IFRS includes
equity cost reduction, increase in foreign investments and stakeholders confidence that has
been eroded by the complexity of the harmonization of the required principles that is based
on the ‘fair value’ (Kraal, Yapa and Joshi 2015).

3FINANCIAL ACCOUNTING THEORY
The major development institutions of financing such as World Bank and the Asian
Development Bank assists ASEAN countries, it is because of the globalized capital markets
developments, mid 1990s Asian Financial crisis and growth of multinational. The creditors
and investors requires for having the reports that are updated as well as the financial
statements, there has been increasingly scrutiny of it by the professional practices of the
countries of ASEAN (Dayanandan et al. 2016). It is because ASEAN countries are in
pressure immensely for the adoption of standards of accounting, which depicts the uniformity
of the standards that is across the borders. IFRS and the local accounting standard
convergence has raised the concerns for the stakeholders especially in having major interests
in ASEAN countries. It becomes problematic for accessing the global market in absence of
the institutionalized set of accounting practices (Gaston and Son 2014). The consolidated
financial statements that are in accordance with the IFRS are prepared by most of listed
companies located in the European Union, New Zealand and Australia. In more than 150
countries, IFRS is adopted as per the International Accounting Standards Board. Formally
during the year 2012, IFRS was being adopted in the countries of ASIAN region, however,
adoption of it has encountered so many issues and challenges by the regulators and the
accounting setters after the adoption of IFRS. In order to reduce the differences of accounting
practices by the countries, the aim is to harmonies the IFRS with that of the local accounting
standards (Zaidi and Paz 2015).
Convergence of IFRS and Adoption in ASEAN
In some of the researches, there has been criticism of applications of unmodified IFRS
in the countries of ASEAN. The extent of accounting harmonization among five countries of
ASEAN has achieved the harmonization of high degree for the measurements in the areas of
consolidated financial statements, marketable securities, long –term investments and the