Reflection on IFRS Adoption, IASB Objectives, and Accounting Practices

This report reflects on the article by Hellmann, Perera, & Patel (2010), examining the contextual issues of International Financial Reporting Standards (IFRS) adoption, using Germany as a case study. The report discusses the IASB's objectives of achieving uniformity in financial accounting and bookkeeping methods. It highlights the challenges posed by differing social, economic, and political environments, leading to non-uniform accounting practices despite IASB's efforts. The report analyzes the differences between de jure and de facto convergence, emphasizing the practical challenges faced by companies, particularly in Germany, in adopting IFRS and accessing international markets. The report stresses the importance of considering contextual factors and providing proper training to accountants to ensure effective IFRS implementation, aiming for uniformity in financial data presentation. The report concludes by underscoring the need for a balanced approach to meet both country-specific and international objectives.

Accounting
Assignment
2019

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By student name
Professor
Date: 4th September 2019.
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Discussion
In this article it is shown how IASB has tried on many aspects to bring uniformity in the financial
accounting and book keeping methods and how various factors like a country’s social, economic and
political views and standing can cause non-uniformity between the accounting practices and methods
that IASB wants to introduce to bring uniformity. In this article it highlights the issues that are related to
the adoption of IFRS in Germany and the unique features of accounting that the companies and the
stakeholders follows in that country. This shows how contextual influences are affecting the successful
adoption of IFRS in Germany. It also goes up to show how in the bigger picture the aim of adoption of
uniformity in accounting treatments between various countries is failing. This also shows that how
companies specially Germany and its stakeholders are facing issues with raising funds in the
international market and how companies globally need to think of ways to overcome this, so that
growth can be multi-dimensional. Thus, we can say that IASB has put in a very genuine effort to
overcome the issues that are associated with accounting methods and accounting policies globally, but
they need to consider the social and the economic factors and then design the overall accounting
policies. It is important that accounting should be used in such a way that it helps in achieving the
economic objectives of the country along with satisfying the needs of the stakeholders on various
grounds. There is a difference in which each country is interpreting the IFRS policies and applying them
and it is also important that accountants should be properly trained and provided proper education so
that they can apply such policies in a proper manner. If these small issues are solved, then the
companies can attain uniformity in which they are presenting their financial data and making their
overall books of accounts (Hellmann, et al., 2019).
There is a difference between de jure and de facto convergence, in case of de jure it refers to the official
status of the matter, it is state of matter that is correct as per the legal policies. In case of de facto it
means the that is true in fact as per the overall practical scenarios that is relevant. In case of the
accounting policies that IASB aims to implement it can be stated as the practical affairs convergence it is
de facto in nature as the practical situations with regards to the political and the economic scenarios are
different than what is stated in paper as per the official statement and the global policies that are issued
by the IASB. It can be said that there is a difference that is relevant from the overall issues that are
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cropping up and hence we can say that this leads to issues that are related to the overall convergence of
the accounting policies on a global basis. There needs to be a balance so that all the objectives on
country basis and internal basis can be achieved.
Bibliography
Hellmann, A., Perera, H. & Patel, C., 2019. Contextual issues of the convergence of International
Financial Reporting Standards:. Advances in Accounting, incorporating Advances in International
Accounting, 2(26), pp. 108-116.
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