A Comprehensive Report on IFRS Impact on Australian Government Finance

This report examines the implications of International Financial Reporting Standards (IFRS) on the Australian government, particularly focusing on financial reporting. It highlights the challenges faced by local governments in implementing IFRS due to the need to balance public benefit with standard compliance. The report discusses the impact on accounting quality, transparency, and ethical behavior, noting increased assets for larger organizations post-implementation. It acknowledges the high costs associated with IFRS adoption and its overall effect on the Australian economy. The study concludes that IFRS implementation promotes quality and ethics in accounting, requiring ongoing investment and education for optimal results. Desklib provides access to this solved assignment and other study resources for students.

ACCOUNTING THEORY AND
CURRENT ISSUES
IMPLICATION OF IFRS ON GOVERNMENT
ARTICLE: IFRS AND THE PUBLIC SECTOR

Executive summary
• The aim of this report is to examine the implication of international accounting in Australia
after the implementation of IFRS standards in different sectors of the government most
especially in how the government generates it report with a focus of the relevant AASB.
• International Financial Reporting Standards (IFRS) introduction has been implemented all
over the world except for a few countries that use other standards such as US and GAAP.

• Literature review has shown that the implementation of IFRS has been labelled as positive
globally though there have been arguments in this sector.
• This report will examine the impact of IFRS on Australia government especially in the
financial report

• In general it can be detected that the implementation of IFRS in
Australia has been good and positive apart from the few cases that have
posed challenge especially to the local government.

• The implementation of IFRS has resulted in the increase of
assets in the situation where it has been used with the
maintenance of the position of large organization unlike
small organizations that mostly improved their position.

Introduction
• With the growth of standards globally an example of a standards implemented in Australia is IFRS
(International Financial Reporting Standards)
• IFRS are examples of accounting standards and they dictate how the financial statements are
reported.

• They were as a result of International Accounting Standards Board IASB and
IFRS foundation trying to harmonize the language used in financial reporting
• It started as an initiative of European Union

• IFRS in Australia has replaced International Accounting Standards IAS since it was mandatory for the
European Union nation .
• IAS was formed by IASC.
• They were implemented in Australia in the year 2005 after the Europen union commission made it a must for
all its members.

• As mentioned earlier the paper examines the implication of IFRS to the Australian
government recognizing that all organizations contribute to the progress or failure of the
nation.
• This report provides a very diverse information that can be used despite the country in
question as guideline to implementation.

Implications of IFRS on Australia
• The implementation of IFRS standards by organizations has had several challenges (Greuning,
2006) therefore this has led to questions on the impact of IFRS on the quality of reporting in
Australia.
• This report therefore looks at this implication in coming up with conclusion on the effect of
Australia.

• Australia is composed of three arms of the government that is the local
government, the commonwealth government and state government
• The implementation of IFRS has been difficult to the local government
(George, Ferguson and Spear, 2013) due to double decision making in
which, while making decisions they must ensure that the decisions they
make are beneficial to the people at the same time they are in line with
the standards.

• This local government has also had to implement a lot of finance in the employment of people as
salary to implement this standards and in teaching them to schools.
• They also have spent money in acquiring teaching resources and formulation of professional
development activities to help educate learners to embrace a standard that emphasizes on
principles rather than just the experience obtained in education (Bond, Govendir and Wells 2016).