International Accounting in australia PDF

Running head: INTERNATIONAL ACCOUNTING 1
IMPLICATIONS OF INTERNATIONAL ACCOUNTING IN AUSTRALIA AFTER IFRS
PERIOD
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INTERNATIONAL ACCOUNTING 2
Executive Summary
This paper provides an analysis of changes in deferred acquisition cost and Non-accrual
loans, Fair Value Measurement, treatment of hedges after the adoption of IFRS standards in
Australia since 1st January 2005. The report is based the findings of a study by Keryn
Chalmers, Jayne M Godfrey and Greg Clinch, 2011. They established that there was an
increase in the importance of earnings after Australia adopted IFRS. Therefore, the paper
provides how these changes are related to deferred acquisition cost and Non-accrual loans,
Fair Value Measurement, treatment of hedges

INTERNATIONAL ACCOUNTING 3
IMPLICATIONS OF INTERNATIONAL ACCOUNTING IN AUSTRALIA AFTER IFRS
PERIOD
Introduction
This report provides an analysis of changes in deferred acquisition cost and Non-accrual
loans, Fair Value Measurement, treatment of hedges as a result of accounting policy changes
in Australian Accounting Standards after the adoption of International Financial Reporting in
Australia. The report is based on analysis of a Journal article, Changes in value relevance of
accounting information upon IFRS adoption: Evidence from Australia by Keryn Chalmers,
Greg Clinch and Jayne M Godfrey, 2011. IFRS are standards provided by the IASB and IFRS
Foundation. Because of growth in international trade and shareholding, there was a need to
come up with uniform standards of financial reporting.
In the study, Chalmers et al examined the possibility that the adoption of IFRS in Australia
enabled an increase in the importance of accounting information for corporate listed in the
Australian Security Exchange. Through using a longitudinal study, they studied the status of
Australian accounting before and after IFRS between 1990 and 2008 (Keryn Chalmers, 2011,
p. 152). They established that after Australia adopted IFRS standards, the relevance of
earnings increased.
Fair Value Measurement
In Australia, the net market value is constituted by the general and life insurers. This is built
by the market environment approximated by fair value. Experts say that before adoption of
IFRS in the country, AASB standards lacked clarity in the guidance used to measure financial
liabilities and assets. In AASB 139, financial assets are categorised into 4 classes: loans and