Holmes Institute: HI6025 - IFRS Adoption and Financial Reporting

This report critically examines the adoption of International Financial Reporting Standards (IFRS) and its usefulness to Australian reporting entities. The analysis includes a comparison of IFRS adoption between Australia and Cambodia, highlighting the different approaches and impacts in each country. The report delves into the transitional issues faced by entities during IFRS implementation, such as the challenges of standardizing financial reporting and the concerns regarding compatibility with existing laws and regulations. Furthermore, it explores the challenges related to accounting concepts like materiality and going concern. The report also references relevant literature, including books and journals, to support its findings and provide a comprehensive understanding of the topic. The report is a solution to the Holmes Institute HI6025 Accounting Theory and Current Issues assignment, and it addresses the key issues of adopting IFRSs and recommends future directions to the national accounting setting bodies.

Critically examine the
usefulness of the financial
reporting regulations to
Australian reporting entities

Table of Contents
a. comparing adoption of IFRS between two countries ..............................................................3
b. transitional issues ....................................................................................................................3
c. challenges faced by entities in relation to accounting concept ...............................................4
REFERENCES................................................................................................................................1

a. comparing adoption of IFRS between two countries
IFRS in Australia IFRS in Cambodia
Internation financial reporting standards are
adopted by the Australia since the year 2005
dated as 1st January (Loyeung and et.al., 2016).
This country has opt for IFRS as these
standards has benefited an Australian economy
and the Australian companies in terms of their
financial reporting across the global peers.
IFRS enables Australian country in leveraging
global market specifically as the accounting is
seen as the global profession.
In the year 2012, Cambodian Accounting
standards board of a NAC has fully opted an
IFRS on 1st January 2012, that has been issued
by IASB. Without any modifications CIFRS
and IFRS are adopted by small and the
medium enterprises in the Cambodia. IFRS
standards are been adopted by Cambodia in
order to bring transparency, efficiency and an
accountability into its financial markets around
the globe (Lay, 2019). An analysis under the
IFRS foundation is mainly on basis of 166
jurisdiction profiles that needs to be followed
by SMEs in Cambodia.
b. transitional issues
The transitional issues faced by the Australia is mainly with respect to different
regulations that and the standards that are developed for financial reporting. For example-
development of AASB and IFRS by the company creates a problem of standardization as both
standards states different measures in financial reporting. There was a concern relating to the
compatibility of an Australian Law with that of an IFRS adoption in the certain principles of
accounting (Chapple, 2018). An Australian entities had a concerned about an uncertainty of tax
treatment that involves an issues relating to subjectivity and an instability in the IFRS adoption
as the fair value reflected as a base for an evaluation of the majority of the items of final reports
in the IFRS.
Similarly, Cambodia also faced a same transitional issues that is developing compatibility
between the CIFRS and IFRS (Cadungog-Uy, 2017). In Cambodia, IFRS is mandatory only for

SMEs and not for other entities so this leads to create problems with respect to standard
regulations across an entire country.
c. challenges faced by entities in relation to accounting concept
It has been highlighted that at the time of adoption of the IFRS, lack of the training
initiation and an education are the factors that posed a major challenge. Problem for an entities,
regulators, interesting parties and the auditors who were been familiar and has the knowledge of
the previous accounting standards (Challenges of IFRS adoption in Australia, 2018). Adoption of
IFRS required gaining of an additional skills for an application and an evaluation of the
appropriate standards while financial reporting. For example- Australian entities faces
regulatory process challenge in adoption of IFRS because it needs drastic modification regarding
the accounting concept that is going concern in the reporting of the financial aspect which in turn
creates difficulties for business. IFRS requires an integration of the single principle approach of
an accounting towards superior knowledge to the business entities in Australia.
The reporting entities in Cambodia faces challenges in relation to the unfamiliarity with
that of the new standards of accounting which needs an update of the regulation. For example-
Accounting concept of materiality states that all the material things must be kept in view while
reporting which could alter decision of users. However, IFRS provides that all the aspects in
reporting are counted as material which creates complexities for entities.

REFERENCES
Books and journals
Cadungog-Uy, J., 2017. Development of the accounting profession in Cambodia 1. In The
Routledge Handbook of Accounting in Asia (pp. 154-165). Routledge.
Chapple, S., 2018. IFRS adoption in Australia: A strong structuration perspective. Accounting
History. 23(3). pp.265-295.
Lay, S., 2019. Empirical assessment of International Financial Reporting Standards adoption in
Cambodia (Doctoral dissertation, Lincoln University).
Loyeung, A. and et.al., 2016. The cost of implementing new accounting standards: The case of
IFRS adoption in Australia. Australian Journal of Management. 41(4). pp.611-632.
Online
Challenges of IFRS adoption in Australia. 2018. [Online]. Available through:
<https://myassignmenthelp.co.uk/freesample/challenges-in-adopting-IFRS-in-australia>
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