International Accounting Standards Committee Research Articles

A Study of Recent Accounting Trends in India's Corporate Sector with Special Reference to International Financial Reporting Standards

Accounting is the process of keeping track of monetary transactions and data in a structured, consistent, and understandable style so that stakeholders in a business or organization may make informed economic decisions. Early forms of accounting used clay tokens to keep track of products and livestock, but the discipline has since evolved into a sophisticated system for recording a wide variety of financial transactions and details. The first step toward IAS, or International Accounting Standards, was done in 1959. Since then, accounting groups and others have collaborated to form the International Accounting Standards Committee. In 1997, the IASC was restructured to better enable the convergence of various national accounting standards and practices toward a single, high-quality set of global accounting standards. Established in 1973, it issued the foundational documents for what is now known as International Accounting Standards until the year 2000. As the International Accounting Standards Committee (IASC) was abolished in 2001, the International Accounting Standards Board (IASB) was tasked with publishing international accounting standards. The integration of global financial markets and the need of investors for more uniformity in the financial reports of multinational firms both demand the globalization of IFRS.

Issues of Control in Accounting: A Comparative Analysis of IAS 27 and IFRS 10

Subsidiaries identification has always been a contentious issue in consolidation of financial statements and till date is one of the most challenging issues accounting standard setting bodies such as the International Accounting Standards Board (IASB) have to contend with. The global financial crisis of 2007 and some prominent accounting scandals in recent history e.g., the Enron saga, have remarkably demonstrated the consequences of wrong application of consolidation rules on entities, investors, and other stakeholders. International Accounting Standard (IAS) 3 – Consolidated financial statements and IAS 27 – Consolidated and separate financial statements were respectively issued in 1976 and 1989 by the International Accounting Standards Committee (IASC) to address these controversies. Additionally, In May 2011, the IASB which replaces the IASC in 2001, published International Financial Reporting Standards (IFRS) 10 which came-up with a revised consolidation model replacing the provisions of IAS-27 and SIC-12. However, the consolidation criteria in IFRS 10 were adjudged as difficult to understand, even amongst experts and even more challenging to apply in practice. IFRS-10 is principled-based and is not only broader and more complex than IAS-27 and Standards Interpretation Committee (SIC) 12, but the structure remains questionable. In addition, the provisions of IFRS 10 contained several terms that were undefined and unspecified which are capable of subjective interpretation and application. In-depth understanding of the new provisions of IFRS 10 and its basic concepts are necessary to achieve the objective of the revised standard. Lack of adequate understanding of the new rules and its basic concepts will practically make it impossible to properly apply the new consolidation criteria. The research methodology adopted is therefore to review relevant literatures, practical and professional assertions by contrasting and comparing the provisions of the two standards.

OPERATING SEGMENTS REPORTING - A CASE STUDY OF RELIANCE INDUSTRIES LTD. AND ITC LTD

Most businesses have extended their scope of operations in recent years to include new sectors, geographic locations, and markets. This widespread movement towards diversification has led to a need for information about the various segments of an enterprise in addition to the consolidated financial statements. The various industry segments may have different rates of profitability, degrees, types of risk, and opportunities for growth. The investors, therefore, can not successfully evaluate a diversified enterprise without information about its various segments. In this regard accounting bodies of various countries have issued Accounting Standards (AS) and segment reporting has been made mandatory. The International Accounting Standards Committee issued International Accounting Standard 14 (IAS14) in 1981 for Segment reporting. Similarly, The Financial Accounting Standards Board (FASB) of the United States of America (USA) issued the Statement of Financial Accounting Standards -14 (SFAS14) in 1974 for the implementation of segment reporting. In India Accounting Standard 17 (AS17) was issued for segment reporting. Accounting standards issued by different bodies are revised from time to time for effective and better implementation of segment reporting. In India also Ind AS 108 -Operating Segments was issued in 2015. This paper is a case study of Reliance Industries Limited and ITC. It is an attempt to show how segment information is reported by the companies and how it is useful for the external users of the financial statements. The study covers the period from the financial year 2019-20 to 2020-21.

Bridging Competing Logics: Re-Reading the History of Transnational Standardization in Accounting

This study seeks to contribute to the understanding of changes in institutional logics by re-reading the history of transnational standardization in accounting. It builds on a comprehensive review of official documents of the International Accounting Standards Committee, now restructured as the International Accounting Standards Board (IASB). The findings indicate that, in the 40-year history of transnational accounting standards-setting, there have been several changes in institutional logics, which, in turn, have encouraged revisions in organizational structure, inter-organizational relationships, standards-setting approach, and sources of legitimacy. These changes have encouraged further revisions in institutional logics (representation and expertise), and vice versa. Especially after the global financial crisis of 2007-2008, the IASB accomplished several institutional changes as a response to internal and external pressures. At the same time, a new organization-level institutional logic has emerged from the process of institutional bricolage, wherein institutional actors (trustees) have picked the best elements of competing logics, thereby bridging the two

Some Aspects of IAS Harmonization Process

The International Accounting Standards Committee (IASC) was established in 1973 to harmonize international accounting standards. The IASC's standards (IASs) are now accepted in some form by numerous stock exchanges, including those in London, Germany, Hong Kong, Singapore, and Switzerland. The US SEC already accepts use of three IASs and has indicated that it may accept all IASs in late 1998. Though accepted by a growing number of stock exchanges, this may not represent individual country's accounting standards. This article investigates the recent progress of international accounting harmonization by examining whether countries' official standards are in compliance with the IASs in the 1990s. Overall, harmonization via IASs appears to increase from 1991 to 1993. However, when the results of the "Comparability of Financial Statements" program became effective in 1995, at least initially, the level of harmonization decreased. This drop is not unexpected given that the 1995 changes eliminated previously approved and practiced accounting methods. This paper provides an introduction to the topic "The Process of International Harmonization of Accounting Standards". Keywords: Harmonization, International Accounting Standard Board (IASB), International Accounting Standards (IAS), Accounting Standards etc. DOI: 10.7176/RJFA/11-17-04 Publication date: October 31 st 2020

APPLICABILITY AND ADOPTION OF IND AS BY STATE GOVERNMENT PSU’S IN ASSAM

Accounting practice gained its importance from the time of industrial revolution with the emergence of large business corporations like Du Pont (1802), General Motors (1908) etc. As a profession this function of business firms has got new direction and has found its modern shape in many countries with the establishment of professional accounting bodies making effort to standardise accounting, and for that matter, financial reporting. A combined effort was initiated for the development of accounting as a discipline and accounting as a profession at international level when International Accounting Standard Committee was set up in 1973. Formulation of International Accounting Standards (IAS) and thereafter International Financial Reporting Standards (IFRS) by the International Accounting Standard Board considering globalisation of business activities bring a new development in financial reporting making these reports more transparent, reliable and useful for decision making.

ACCOUNTING IN FOREIGN COUNTRIES

The article considers the regulatory framework of and their structure. The authors analyzed concepts of international standards and The focus of this study is on two types of accounting standards. The paper concentrates on stages of IFRS and their status. The activity of the IAS Board is studied. The classification of accounting according by their economic content is designed. The authors compare descriptions of financial and management accounting. The study concentrates on structure of national accounting and their division by economic content. The factors that influence accounting in different countries are outlined out and a common factor uniting all the types of accounting is highlighted. The article classifies Britain’s and the United States’, continental and the South American systems. The question what countries use those systems is explored. The paper pays special attention on activity of the International Accounting Standards Committee. The IFRS status and application of those are determined. The authors consider advantages of accounting and financial reports, having in mind the and its basis is the empowerment of access to the capital markets. The list of the countries that legally use International Financial Reporting Standards is identified. With an emphasis on components of the required financial reporting forms in foreign countries the implementation stages of accounting and reporting in Ukraine are explored.

Segment Reporting Practices in India: A Case Study of TCS

Segment reporting requires companies especially those which are multi-product and multi-location to disclose their segment-wise operations in their annual reports as well as in their quarterly reports. The users of financial statements have different utilities for the financial information. The users of accounting information are the stakeholders and they are mainly concerned with financial information of various segments of business. The concept of segment reporting in a formalized form is almost 32 years old. It was proposed in 1974 when the Financial Accounting Standard Board (FASB) of USA issued Statement of Financial Accounting Standards (SFAS) 14. After, this International Accounting Standards Committee issued IAS 14 reporting financial information by segment in 1981. Both SFAS 14 and IAS 14 were revised to make segment reporting more informative. SFAS 14 was revised by the FASB with the issue of SFAS 131 in 1997, whereas IAS 14 was revised in 1998. Now, several countries through the standards issued by their respective national institutions have made the segment reporting mandatory. AS 17 in India mandates listed and other companies to report their financial information by segments. The present case study highlights the segment reporting of Tata Consultancy Services (TCS). How the critical analysis of segment reporting is carried out and how it is useful for the external users? This study develops an empirical proxy for the quality of segment reporting from the data in company’s annual reports. Information about an entity’s geographical and business segments is relevant in assessing the risks and returns of a diversified or multinational entity for which such information is often difficult or impossible to determine from aggregated data.

Islamic Finance and the Convergence towards International Financial Reporting Standards (IFRS): The State of Research Development

Objective – Extensive research has been undertaken in the area of accounting harmonization ever since the idea of harmonizing accounting standards and practices was probably initiated as early as 1930s. The transformation of International Accounting Standard Committee (IASC) into International Accounting Standard Board (IASB) in 2001, which refines the harmonization agenda into convergence initiative, has escalated the academic research devoted in this field. Nevertheless within the broad research theme of International accounting harmonization and convergence (IAHC), quite limited studies have looked at the issues of IAHC and linking it to the development of Islamic banking and finance. Not until recently where quite significant acknowledgement has been given on this issue especially by the industry community, the earlier development of research in IAHC has not sufficiently covered the interaction between IAHC and the Islamic financial industry. Departing from this context, this paper aims to review the development of research that particularly looked into the issues of IAHC in relation to the Islamic financial industry.Design/methodology – This study was conducted based on rigorous literature review about the topic to identify gaps or inconsistencies in a body of knowledge.Results – Research in IAHC has progressed over the time evidenced with the various topics that have been studied within this theme. Of the broad research theme within IAHC is its interaction with the growing Islamic financial industry. While the reviewed studies in this paper have provided preliminary path in identifying the challenges of IAHC in relation to the financial reporting of Islamic banks (IBs), however there is lacking studies that theoretically and practically examines areas of incompatibility which may prove to be obstacles to the IAHC process and other important elements such as to understand what could be the possible approach to be pursued by IBs within the overall objective of IAHC or IFRS convergence specifically. Most studies within this theme are notably descriptive in nature and few has utilized the empirical method in their analysis.Research limitations/implications – This study is limited in its method of merely reviewing the literature. The use of other various methods may provide more meaningful findings. The result of this study nevertheless implies that further comprehensive research involving standard setters and regulators is viewed as an important future step in resolving the reporting issues for Islamic financial institutions. Given the unresolved dimensions between the adoption of IFRS and the application of Islamic financial activities, the issues examined in this study will continue to be highly relevant, as the Islamic financial industry expands further.Novelty/Originality – A review of researches in IAHC with particular reference to the unique accounting requirements of Islamic financial entities is still limited thus this study perhaps has sketched a map of overall studies that have been performed and shed the light for future areas to be researched within this themeKeywords Islamic Finance, IFRS Convergence, Accounting Harmonization

Pengaruh Implementasi Asi International Financial Reporting Standard dalam Rangka Indeks Gray Leverage terhadap Pengungkapan Laporan Keuangan

Disclosure of financial statements is a mean of delivering information by the company’s internal to stakeholders outside of the company. On this globalization era, IASC (International Accounting Standard Committee) tries to create a custom standard for all in order to financial statement can be understood by all users in different countries, and so the IFRS (International Financial Reporting Standard) is published. It certainly brings a big impact on accounting study in Indonesia. One of those is about convergence of IFRS into PSAK as base of financial reporting as one form of disclosure to stakeholders outside of the company. This study was conducted to obtain empirical evidence about the effect of the implementation IFRS on the disclosure of financial statements as measured by leverage in this case the Gray index. The populations in this study are all listed banks in Indonesia Stock Exchange for the period of 2009-2014. Sample was 30 banking firms selected using purposive sampling method with predetermined criteria. Independent variable is in the form of leverage Gray index. Analysis used in this study is a descriptive analysis and simple linear regression analysis with SPSS as tool for calculation. The result showed the implementation of IFRS in the leverage Gray index has no effect on financial disclosure. Conclusions of the research are implementation of IFRS itself has effect on the financial disclosure but Gray index leverage has no significant effect under the IFRS standards. Result from t-test value is -0.122 and smaller than t-table value of 2.048. Thus, the variable of Gray index leverage is not recommended to be used to measure the width of financial reports disclosures under the standards of IFRS. There are still many aspects to be studied to determine the effect of accounting standards using other representations of company characteristics.

Do Listed Companies Need an IFRS Committee Beside Audit Committee?

ct The aim of the study is to identify the necessity of forming an international accounting standards committee from the board of director and to investigate its role in reinforcing corporate governance pillars and the integrity of financial reporting. A questionnaire was designed containing 18 items distributed to a sample of 121 external auditors and 121 financial managers of companies listed in Amman Stock Exchange. Response rate of usable survey instruments reached 78%. With the help of SPSS program, one Sample T-Test used to analyze the contents of the survey instrument. The results showed that listed companies face difficulties in applying both the international accounting standards and corporate governance best practices, and also revealed that huge duties placed on the audit committees limits their ability to fulfill their objectives properly and securing the soundness of financial reporting system, therefore this study recommends the formation of an International Accounting Standards Committee from the board of directors to supervise and monitor accounting practices, evaluation judgments, recognition, measurement policies and ensuring adequate disclosure and transparency in accordance with IFRS.

REPERCUSIÓN EN LA PARTE FISCAL DE LAS NORMAS INTERNACIONALES DE INFORMACIÓN FINANCIERA EN COLOMBIA

El artículo pretende resolver las inquietudes y vacíos que giran en torno al impacto que tienen las Normas Internacionales de Información Financiera en la parte fiscal, las cuales fueron implementadas con el fin de atraer inversionistas extranjeros al país, poder incursionar en la globalización de los negocios y manejar un mismo idioma en el campo financiero, En ese sentido, el gobierno colombiano decide implementar las Normas Internacionales de Contabilidad, NIIF, también denominadas NIC, las cuales son un conjunto de postulados generales de Contabilidad, que tienen como fin estandarizar a nivel mundial las normas con las que cada país, entiéndase sus empresas, llevan la Contabilidad. Dichas normas, fueron creadas inicialmente por el International Accounting Standards Committee, IASC, organismo que fue conformado en 1973 por profesionales de Contabilidad que a su vez han sido reemplazadas por (IASCF, IASB Y CINIIF) ,en contraste con el Decreto 2649 de 1993, normatividad esta, vigente a nivel fiscal en Colombia; ante esta realidad, las compañías deben adaptar sus modelos de procesamiento de información financiera para incorporarles la capacidad de operar los dos sistemas de manera simultánea, el que acoge las NIIF y el que se basa en las normas contables colombianas, porque si no tienen trazabilidad, van a tener un problema para efectos probatorios

Developments in Financial Sector Legislation, Regulation and Infrastructure: Implications for Accession Countries

Financial sector legislation and regulation is an area of crucial importance for the acquis process. Various regulatory frameworks, standards and institutions are involved. These include the Core Principles for Effective Banking Supervision, formulated by the Basel Committee for Banking Supervision, the Objectives and Principles of Securities Regulation, formulated by the International Organization of Securities Commissions (IOSCO), and standards being developed by the Committee on Payment and Settlement Systems (CPSS), the International Association of Insurance Supervisors (IAIS), and the International Accounting Standards Committee (IASC). The infrastructure of the financial system is widely considered as a “blood” system of the economy. This paper will focus on the developments in financial sector legislation, regulation and infrastructure in accession countries.

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from the UK

Drawing on secondary data, we examine the transposition of the Accounting Directive 2013 into UK GAAP with a specific focus on references to IFRS. The process involved consultation and regulatory impact assessment on the options in the Accounting Directive and proposed changes to accounting standards for non-publicly accountable entities. This led to an IFRS-based approach from 2016 with three tiers: EU-adopted IFRS for group listed companies and other publicly accountable entities, an adaptation of IFRS for SMEs for non-publicly accountable entities, and a simplified version for micro-entities incorporating the requirements of the Accounting Directive. This outcome is not surprising since the UK was one of the founding members of the original International Accounting Standards Committee and a strong proponent of little GAAP. Indeed, the UK’s former Financial Reporting Standard for Smaller Entities provided a model for the IFRS for SMEs. In the past, there were few references to IFRS by the UK’s enforcement and interpretation bodies. Today, guidance is taken from IFRS Interpretations Committee. We contribute to the literature by describing the main processes involved in implementing the Accounting Directive and the move to an IFRS-based approach in UK GAAP. Our analysis should be of interest to researchers and policymakers alike.

L’Union européenne face aux normes internationales de reporting financier (IFRS) : une mise en perspective historique

For nearly twenty-five years the European accounting harmonization is reflected in the adoption of directives. In the mid 1990s, the European Commission announced that it was abandoning this accounting harmonization mode for listed companies publishing consolidated accounts. It opted for a more international accounting standardization process under the aegis of the International Accounting Standards Committee. The reasons for this change in strategy have already been analyzed in several studies. The present research aims to understand why the criticism of the European Commission against the directives were so violent. From the archives available around the negotiation of the Seventh Directive and relying on the work of Diggle and Nobes (1994) and those of Van Hulle and Van der Tas (1995) we highlight the scars left by negotiation the Seventh Council Directive, questioning the effectiveness of the inherent options directives and the influence of the International Organization of Securities Commissions to promote reconciliation with the International Accounting Standards Committee. This article contributes to a better understanding of changes in accounting regulation.

International Accounting Normalization and Harmonization Processes across the World: History and Overview

AbstractBased on a literature review, the paper traces the history of the International Accounting normalization, and presents an overview of the harmonization process across different regions of the world.In a first part we present the circumstances that led to the genesis of the International Accounting Standards Committee (IASC) in 1973, by returning to the evolution of its notoriety, and to the production of its first international accounting standards (IAS). After discussing the replacement of the IASC in 2001 by the International Accounting Standards Committee Foundation (IASCF) and the International Accounting standards Board (IASB), we give details on how the international standards were henceforth called International Financial Reporting Standards (IFRS), due to their new dominating financial aspect.In the second part of the paper, we discuss the existing differences between developed and developing countries regarding the international accounting harmonization process. After discussing the limits and the advantages of the international accounting harmonization, we raise the issue of financial security in relation to the process of international accounting harmonization.

THE ROLE OF NON-GOVERNMENTAL ORGANIZATIONS (NGOs) AS INTERMEDIARIES OF THE EUROPEAN UNION DECISION TO ADOPT INTERNATIONAL ACCOUNTING STANDARDS: 1973–2002

This paper analyzes the role of non-governmental organizations (NGOs) as intermediaries in encouraging the European Union (EU) to adopt International Accounting Standards (IAS). Our analysis begins with the 1973 founding of the International Accounting Standards Committee (IASC), and ends with 2002 when the binding EU regulation was approved. We document the many pathways of interaction between European supranational, governmental bodies and the IASC/IASB, as well as important regional NGOs, such as the Union Européenne des Experts Comptables, Économiques et Financiers (UEC), the Groupe d'Etudes des Experts Comptables de la Communauté Économique Européenne (Groupe d'Etudes), and their successor, the Fédération des Experts Comptables Européens (FEE). This study investigates, through personal interviews of key individuals involved in making the history of the organizations studied, and an extensive set of primary sources, how NGOs filled key roles in the process of harmonization of international accounting standards.

The Role of Non-Governmental Organizations (NGOs) as Intermediaries of the European Union Decision to Adopt International Accounting Standards: 1973-2002

This paper analyzes the role of non-governmental organizations (NGOs) as intermediaries in encouraging the European Union (EU) to adopt International Accounting Standards (IAS). Our analysis begins with the 1973 foundation of the International Accounting Standards Committee (IASC), and ends with 2002 when the binding EU regulation was approved. We document the many pathways of interaction between the EEC/EC/EU and the IASC/IASB, as well as other important regional NGOs, such as the Union Europeenne des Experts Comptables, Economiques et Financiers (UEC), the Groupe d’Etudes des Experts Comptables de la C.E.E. (Groupe d’Etudes), and their successor, the Federation des Experts Comptables Europeens (FEE). This study investigates, primarily through personal in-depth interviews of key individuals involved in making the history of the organizations studied, and a unique set of primary sources, including IASC Archive files and EEC/EC/EU documents, how NGOs filled key roles in the process of harmonization of international accounting standards.

Regards and Views toward International Accounting Standards Setting: A Critical Examination and Discussion

Accounting information is the basis for the stakeholders who take different economic decision time to time by assessing those accounting information reported by the business organization. That’s why; international accounting standard setting committee aims to protect the interest of the stakeholders by formulating a high-quality reporting standard. But this standard setting process is hindered by many external lobbying groups like government, political, economic and corporate group because there are the agency and other problems. This study aims to examine and discuss the theoretical and conceptual frameworks like different approaches and theories like a free market and regulatory approach. Moreover, it is still a debate whether free market or regulatory approach ensures the interest of the stakeholders more. However, this study identifies that standard setting process should be a holistic approach that should protect the interest of not only the stakeholders but also the organization.

The impact of meta-standardization upon standards convergence: the case of the international accounting standard for off-balance-sheet financing

Analyses of transnational governance formation point to the destabilizing effects transnational standard setters have upon national institutional configurations. Isomorphic pressures, it is argued, lead to the standardization of procedures used and actors involved in standard setting processes. What is not clear, however, is to what extent this meta-standardization increases the chances for convergence of national with transnational standards. This article explores this question for the case of the international accounting standard for off-balance-sheet financing in the Netherlands, France and Germany. It argues that the reconfiguration of domestic governance architectures had a decisive impact on convergence processes. Counter-intuitively, copying goals, membership and procedures of the transnational, private International Accounting Standards Committee limited the chances of rule convergence, as it threatened to deinstitutionalize the standard-setting role of an important national champion of rule-convergence, the banking regulator. The institutional template developed at the transnational level created actor-mismatch at the national level between those formulating and those implementing the rules, thereby weakening the coalition for rule change. A strong coalition, however, is needed to overcome vested business interests that favor convergence with transnational templates for legitimacy gains at the same time that they oppose convergence to contentious rules that limit their business activities.