Perceived Costs and Benefits of IFRS Adoption in Asian Countries

Running Head: FINANCIAL ACCOUNTING THEORY
FINANCIAL ACCOUNTING THEORY
Name of the Student
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Author Note

1FINANCIAL ACCOUNTING THEEORY
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Role of IFRS and IAS in the Development of International Accounting Standards.............2
IFRS convergence and the adoption in ASEAN....................................................................3
Benefits of IFRS Standard Adoption.....................................................................................5
Differences in the Implementations of IFRS.........................................................................6
Conclusions................................................................................................................................7
Reference....................................................................................................................................9

2FINANCIAL ACCOUNTING THEEORY
Introduction
The aim of this assignment is to discuss on the perceived costs as well as benefits of
the adoption of the International Accounting Standards in the Asian Countries. Adopting
International Financial Reporting Standards sets the procedures that must have to be followed
by the organization when they are adopting IFRS for the very first time as the basis for the
preparations of the general-purpose financial statements. Hence, under this assignment
discussion will be on application of the broad knowledge of the business practices in the
diverse context. The purpose of the assignment is the examination of the professional
accountant’s perceptions in the Asian Countries and the perceived benefits that are associated
with the International Financial Reporting Standards in the respective nations and the
implications of the standards for the auditing and accounting professions in the country in
which they practice. Under, this assignment, discussion will be also be done on the extent of
the adoption of IFRS/IAS standards of accounting supported by state, government and the
local accounting bodies professionals (Zaidi and Paz 2015).
Discussion
Role of IFRS and IAS in the Development of International Accounting Standards
The assistance of the ASEAN countries is done by the major development financing
institutions that includes Asian Development Bank and World Bank, which is mainly because
of the developments of the globalized capital markets, multi-national enterprises growth as
well as Asian financial crisis in mud of the 1990s. It is because of the requirement of the
creditors and investors is for getting the up-to-date reports and the financial statements, the
professional practices of the ASEAN countries are increasingly being scrutinized
(Kusumasari 2016). Therefore, because of this, ASEAN countries are immensely in pressure
for adopting the accounting standards that depicts uniformity of standards across the borders.

3FINANCIAL ACCOUNTING THEEORY
The convergence of the localized accounting standards with that of the IFRS is one of the
rising concerns among the stakeholders with the major interest in the ASEAN countries.
Access to the global market becomes very problematic without having the institutionalized
set of the practices of accounting. Since from the year 2005, most of the listed companies that
are located in the Australia, New Zealand and European Union prepare the consolidated
financial statements according to the IFRS (Zaidi and Paz 2015). As per International
Accounting Standards Board, IFRS has been adopted by more than 150 countries. Many
countries in ASIAN region have adopted formally IFRS in the year 2012, but the accounting
setters and their regulators have faced so many challenges after the adoption. The objective of
the harmonization of the local standard with the IFRS is for reducing the differences of the
practices of the accounting among the countries (Wardhani and Anggraenni 2017).
According to Mahesh Joshi, the accounting professionals in the countries such as
Malaysia, Indonesia and Singapore have supported strongly the adoption of IFRS, their
opinions of them does not differ significantly by the professional qualifications, experiences
as well as training place. It has been analyzed that the countries have benefitted from the
harmonization with the global accounting standards (Joshi, Yapa and Kraal 2015).
According to Diane Kraal, the IFRS has the benefits that include increase of the
foreign investment; reduction of the equity cost as well as confidence of the stakeholders has
eroded by complex harmonization of the requirements of the principles based ‘fair value’
(Kraal, Yapa and Joshi 2015).
IFRS convergence and the adoption in ASEAN
From the early globalization campaign by IASB, application of the IFRS unmodified
in the ASEAN countries has been criticized in some of the researches. Among the five
ASEAN countries, the extent of the harmonization of accounting have achieved high degree