Question-   International Accounting and Auditing Standards

Solution-

IFRS journey in Bangladesh

IFRS is short for International Financial Reporting Standards. IFRS is the international accounting framework within which to properly organize and report financial information. It is derived from the pronouncements of the London-based International Accounting Standards Board (IASB). It is currently the required accounting framework in more than 120 countries. IFRS requires businesses to report their financial results and financial position using the same rules; this means that, barring any fraudulent manipulation, there is considerable uniformity in the financial reporting of all businesses using IFRS, which makes it easier to compare and contrast their financial results. IFRS is used primarily by businesses reporting their financial results anywhere in the world except the United States. Generally Accepted Accounting Principles, or GAAP, is the accounting framework used in the United States. GAAP is much more rules-based than IFRS. IFRS focuses more on general principles than GAAP, which makes the IFRS body of work much smaller, cleaner, and easier to understand than GAAP.

IFRS covers a broad array of topics, including:

  • Presentation of financial statements
  • Revenue recognition
  • Employee benefits
  • Borrowing costs
  • Income taxes
  • Investment in associates
  • Inventories
  • Fixed assets
  • Intangible assets
  • Leases
  • Retirement benefit plans
  • Business combinations
  • Foreign exchange rates
  • Operating segments
  • Subsequent events
  • Industry-specific accounting, such as mineral resources and agriculture

 

 

 

 

 

 

History: Nowadays are the era of free trade and the national independence economies. Many largest companies often do their business in foreign country rather than in their home country. Companies now need home and foreign capital markets for their financing. Indeed, recognizing to have same standard for financial reporting is very important. Thus, revolution in financial reporting began. In the previous many country used and have their own standard for financial reporting or maybe follow the standard that big countries used, such as United States or Europe. Then, there’s a rapid change. On 2001 there is a single set of rules that now is used over 115 countries under the named International Financial Reporting Standard (IFRS). Actually, the concept of convergence has been aroused since the post World War II where there was economic collapse. Every nation seemed agree to have one standard to minimize the miscommunication in the financial report and also to reducing differences among the accounting principles. IFRS has been known long time ago under the name IAS (International Accounting Standard). IAS was issued since 1973-2000 by IASC (International Accounting Standards Committee). IAS was issued in order to fix the global accounting standard thus there would be better financial understanding of all companies. But then, on April 1, 2001 IASB (International Accounting Standard Board) replace the IASC and took over responsibility to build international accounting standard and named it IFRS. The reason why this world needs an international accounting standard is quite simple. The world is getting borderless.

Journey in Bangladesh: In Bangladesh, IFRS adopted through three phases and also most of the part of IFRS not yet completed so far. Firstly, in 1999 government of Bangladesh started the IAS‟s adoption process and also by the end of that particular year 16 phases were under consideration After couple of years later on 2005, all local listed companies were required to use IFRS accounting Standards Later on end of 2005, Bangladesh Financial reporting Standards (BFRS) adopted IFRS 3 and IFRS 5. Furthermore, on 2008 BFRS again took adoption of IFRS 1,4,7 and 8.Then following year 2009 BFRS conducted with 8 phases of IFRS and 26 phases of IASs .Throughout this time, the processing of IFRS adoption in an ongoing program and ICAB still plans to maintain this ongoing process till June 2010.Afterward, while the standards are revised and approved, the Instituted of chartered Accountant of Bangladesh (ICAB) gave a new named “Bangladesh Accounting Standard” (BAS). It is also mentioned that, most of these carbon copies of original IAS‟s. While process has been done than Security Exchange Commission of Bangladesh (SEC) hold the responsibilities and became delegated of Government of Bangladesh to monitor compliance all those standards by listed company in Bangladesh.

 

 

 

 

BAS development

IAS No.

Title

status

date

1

Presentation of Financial Statements

Adopted

1 January 2007

2

Inventories

Adopted

1 January 2007

7

Cash Flow Statements

Adopted

1 January 1999

8

Accounting Policies, Changes in Accounting Estimates and Errors

Adopted

1 January 2007

10

Events after the Balance Sheet Date

Adopted

1 January 2007

11

Construction Contracts

Adopted

I January 1999

12

Income Taxes

Adopted.

1 January 1999

16

Property, Plant and Equipment

Adopted

1 January 2007

17

Leases

Adopted

I January 2007

18

Revenue

Adopted

1 January 2007

19

Employee Benefits

Adopted

1 January 2004

20

Accounting for Government Grants and Disclosure of Government Assistance

Adopted

1 January 1999

21

The Effects of Changes in Foreign Exchange Rates

Adopted

1 January 2007

23

Borrowing Costs

Adopted

1 January 2010

24

Related Party Disclosures

Adopted

1 January 2007

26

Accounting and Reporting by Retirement Benefit Plans

Adopted

1 January 2007

27

Consolidated and Separate Financial Statements

Adopted

1 January 2010

28

Investments in Associates

Adopted

1 January 2007

29

Financial Reporting in Hyperinflationary Economies

31

Interests in Joint Ventures

Adopted

1 January 2007

32

Financial Instruments: Presentation

Adopted

1 January 2010

33

Earnings per Share

Adopted

1 January 2007

34

Interim Financial Reporting

Adopted

1 January 1999

36

Impairment of Assets

Adopted

1 January 2005

37

Provisions, Contingent Liabilities and Contingent Assets

Adopted

1 January 2007

38

Intangible Assets

Adopted

1 January 2005

39

Financial Instruments: Recognition and Measurement

Adopted

1 January 2010

40

Investment Property

Adopted

1 January 2007

41

Agriculture

Adopted

1 January 2007

 

 

 

IFRS development

IFRS No.

IFRS title

Status

Date

1

First-time Adoption of International Financial Reporting Standards

Adopted

01-Jan-09

2

Share Based Payment

Adopted

01-Jan-07

3

Business Combinations

Adopted

01-Jan-10

4

Insurance Contracts

Adopted

01-Jan-10

5

Non-Current Assets held for Sale and Discontinued Operations

Adopted

01-Jan-07

6

Exploration for and Evaluation of Mineral Resources

Adopted

01-Jan-07

7

Financial Instruments: Disclosures

Adopted

01-Jan-10

8

Operating Segments

Adopted

01-Jan-10

9

Financial Instruments

Not adopted

10

Consolidated Financial Statements

Adopted

01-Jan-13

11

Joint Arrangements

Adopted

01-Jan-13

12

Disclosure of Interests in Other Entities

Adopted

01-Jan-13

13

Fair Value Measurement

Adopted

01-Jan-13

 

 

 

 

 

 

 

 

 

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