Objectives of Developing International Accounting Standards

This presentation discusses the objectives of developing International Accounting Standards (IAS) and their impact on organizations. It also identifies and explains relevant IAS applied to specific financial situations. Additionally, it examines the key features of international finance and the major institutions involved in the international financial environment.

International Finance
TASK 1

Describing and assessing the objectives of developing
International Accounting Standards
International accounting standards : It is an older accounting standard which was
replaced in 2001 by the international financial reporting system. It was issued by IASB
(international accounting standard board). The goal of the standard it is to compare the
business in the global market with the other businesses. It increases the transparency and
accuracy of the financial statements.
 Objectives of IAS
 To develop the standard to check the accuracy and transparency of the data of the
company and help the stakeholders to evaluate the information.
 To present the financial information and statements by using the standards for the
worldwide acceptance.
 To regulate the accounting transaction and activities and improve them to get the higher
profit and market share.

Identifying and explaining the relevant International
Accounting Standards which are applied to specific
financial situations
Different international accounting standard
There are various accounting standard which are used for the treatment of different
financial transaction such as valuation of inventory, current assets, non current assets etc.
Luxury chocolates Ltd. Company use the various international accounting standard for
valuation of inventory, current assets and liability, non current assets etc.
 Valuation of inventory : IAS 2
 Valuation of non-current assets : IAS 16

CONTD..
Application of accounting concept and principles
 Accounting concept and principles are prepared to provide a guidelines and framework
to treat the accounting transaction and run the business effectively. There are different
accounting principles and concept such as going concern, separate entity, realisation, full
disclosure, materiality concept etc. The application of the concept is
 To provide the financial position with the accuracy and reliability and help the financial
manager to take the effective decision.
 It also helps the company to prepare the financial statements by following the general
guidelines so the customer can relay on the statements.
 It records the transaction and interpret them to get the effective and efficient decision to
resolve the financial problems and provide base to compare the current position with the
past position or the performance of other companies.

Examining the key features of international finance and
the major institutions involved in the international
financial environment.
Key features of international finance and major international financial institutions
 International finance is required by the company to accomplish the goal and objectives
and attain the target with the available resources.
 It covers the different areas like exchange rate, foreign direct investment, monetary
system etc. to resolve the financial issues.

Evaluating the Implication of IAS on the organisation
 IAS makes a huge impact on the performance of the Luxury Chocolate Ltd by
controlling and monitoring the business transaction. The different accounting standard
are used to treat the different financial issues. For example :
 IAS 1 for presentation of financial statements
 IAS 2 for inventory management
 IAS 7 for cash flow statements
 IAS 8 accounting policies etc.

CONTD..
Pros of IAS 1
 It helps the company to prepare the financial statements such as cash flow, balance
sheet, income statements etc.
 It provided a set of guidelines to evaluate the financial position of the company and
major the required changes to get the efficient output.
Cons of IAS 1
 The rigidity and strict regulation limits the power of the luxury chocolates Ltd.
Company and force to follow the guideline for treatment of financial transaction.
 It also requires the expert knowledge to manage and understand the applicability of the
standard in the company.

CONTD..
Pros of IAS 2
 It helps to record the chocolates inventory and set the price of the luxury chocolates to
earn the higher profit.
 IAS 2 provide different methods to regulate the stock and get the true position of
company in the market.
Cons of IAS 2
 It does not allow company to use the LIFO method for the valuation of inventory
because of the tax burden.
 There are different alternatives for the valuation of inventory. AS 2 does not provide the
guideline for the choice of the best alternative.

REFERENCES
Berger, T. M. M., 2018. IPSAS explained: A summary of international public sector
accounting standards. John Wiley & Sons.
Baukmann, D., 2018. International accounting standards: IAS und HGB im
Konzernabschluss. Walter de Gruyter GmbH & Co KG.
Mnif Sellami, Y. and Gafsi, Y., 2019. Institutional and economic factors affecting the
adoption of international public sector accounting standards. International Journal of
Public Administration. 42(2). pp.119-131.
Christensen, H. B. and et.al., 2015. Incentives or standards: What determines accounting
quality changes around IFRS adoption?. European Accounting Review. 24(1). pp.31-61.