The Effect of IFRS Adoption on the Financial Reports of Local Government Entities
Added on 2021-05-31
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Political Science
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Running head: RESEARCH PAPER ON INTERNATIONAL ACCOUNTING 1Research Paper on International Accounting:“The Effect of IFRS Adoption on the Financial Reports of Local Government Entities”Student NameInstitutional Affiliation
RESEARCH PAPER ON INTERNATIONAL ACCOUNTING 2Table of ContentsSummary of the Article...................................................................................................................2Major International Accounting Implications from the Study........................................................4Effects of IFRS Adoption on Debt Financing.............................................................................5Conceptualization and Focus Contribution Effects of IFRS Adoption...........................................6References........................................................................................................................................9
RESEARCH PAPER ON INTERNATIONAL ACCOUNTING 3Summary of the ArticleThe primary journal used in the research mainly named as “The effect of IFRS Adoption on the financial reporting of local government entities.” The article was written by Manzurul Alam and Kamran Ahmed and aims at establishing different accounting changes and componentssuch as assets, equity as well as surplus. This journal also explains various accounting policies aswell as the criteria which need re-evaluation as far as the overall concept is concerned. Moreover, the article gives the preferable mechanism of changing the accounting policies from the overall Australian Accounting Standards or also known as (AAS) to the International Financial Reporting System abbreviated as (IFRS). The analogy that the IFRS is a both a paradigm and paramount shifting in line with financial reporting analysis is what drives the various changes in the accounting docket. In this case, the article demarcated that among the countries which need this IFRS system, is Australia and the technique will hasten the local government in the country (Ahmed, & Alam, 2012).Indeed, Australia was the first country to adopt the system which later on was also adopted in the USA and European Union. The study indicated that Australia adopted the makeable IKFS system in line with accounting policy in 2004. Afterward, pressure compiled the U.S.A. and the European Union to adopt the IFKS system. IFKS mainly founded ground on the basis that there is assets reconciliations and requirements in terms of the GAAP when using the system. Thus, Ahmed and Alam mainly explored and evaluated the impacts of the IFRS adoptionin the local government of Australia in terms of the surplus, the equalities, assets as well as the liabilities (Ahmed, & Alam, 2012). In this case, they based their studies on the annual local government report on various significance of adopting the norm in the country. In the research recommendation, Ahmed and Alam suggested that the use of PwC tat implementation tool when
RESEARCH PAPER ON INTERNATIONAL ACCOUNTING 4dealing with the IFRS at the local government level is more complex. This is because the system primarily requires and involves preferably country-specified accountings which have contradictory standards as compared to the IFKS. As a result, there are a number of conversional issues which emerge and these include fixed asset valuation, building and land leases, joint associations as well as pension plans. Thus, the controversial issues hastened the debate during the implementation exercise conducted by the Financial Reporting Council also known as (FRC).Ono of the major concern was on the substantial changes which were being evident because of the use of the makeable IFRS in the country. In essence, the adoption of the IFRS brought in numerous modifications and changes in the overall existing Australian standards. Thus, the ranges varied from the formats to costs as well as the profit benefits which different companies recorded annually and demarcating that IFRS impacts were significant to the country. Moreover, the analysis conducted by the Ahmed and Alam, mainly aimed at appraising the accounting firms and policy in line with the use of the IFRS, posing on the necessary modifications as a result of the AAS as well as IFRS introduction(Ahmed, & Alam, 2012).Moreover, this journal also appraised various decision making criteria pertaining the localgovernment in the country as a whole. Subsequently, analysis on the larger and smaller IFRS council also appraised in this study as it was viewed to have implications on the coping aspect. Ahmed and Alam conducted an empirical analysis to verify the implications of the IFKS in local government and all its entities. The empirical results indicated that there various losses recorded when changing the accounting policy and these losses are more imminence in the surplus and accounting equity elements. In addition, in their review Ahmed and Alam used the 117 Australian annual reports for the local government and, in this case, various components were
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