...Romania’s Post Communism Accounting Practices and The Effects of Adapting IFRS for SMEs Abstract Romania, located in southeastern European, was heavily influenced by the Russian Soviet Union as a socialist republic between 1947 and 1989. With becoming a capitalist country in 1989, its accounting practices began its transformation. The purpose of this paper is to analyze Romania accounting practices post its revolution. The paper discusses three major accounting practice conversions made in Romania post communism. Included in this paper are comparisons of previous practices and the implications presented within each practice; along with the pros and cons and many challenges that are associated with the adaptation of International Financial Reporting Standards (IFRS) for small and medium-sized entities (SMEs). Romania’s Post Communism Accounting Practices and The Effects of Adapting IFRS Romania is country located in southeastern Europe and is the ninth largest country of the European Union. Between 1947 and 1989, Romania was controlled by the Russian Soviet Union and enforced by communism. Today, reported in its 2011 Census, Romania’s currently has a population of 21,390,000 people and a gross domestic product (GDP) of $179,793,512,340. Though now considered as an upper-middle income country by the World Bank, Romania has faced many transitions from communism to capitalism over the course of the past three...
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... Entities: IFRS FOR SMEs 1- Introduction Now days the word has become one global market where there is no border for business to operate. To help facilitate that globalization, businesses have to present their financial statement on the same basis as its foreign competitors, making comparisons easier. That why the use of the International Financial Reporting Standards (IFRS) which is a set of accounting standard is necessary and has for goal to provide a global framework for how public companies to prepare and disclose their financial statements is necessary to be implement. Furthermore, companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company-wide. But because of their size and the context of the financial statement small and medium size entities SMEs cannot use the same IFRS as the public companies thought the also aspire to the globalization due to the cost of that full IFRS which may overcome their profit. The use of a special IFRS is welcome. To show that, we are going to talk about the appropriateness, necessity and experience of an IFRS for SMEs by in one hand describing the IFRS for SMEs in insisting on the description of the SMEs; and in another hand by stating the need for an IFRS for SMEs and emphasis in the South Africa context. The IFRS for SMEs will be introduce and in detail with more focus on the application of IFRS for south Africa SMEs 2- International Financial Reporting...
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...It has been well known that most or even all companies have got a legal obligation to prepare financial statement in many countries. The requirements for preparing financial reporting are usually based on adequate mixture of legislation, accounting standards and specific requirements such as stock exchange rules. Those requirements often give different reporting obligation to entities according to their characteristics such as scope and social or economic substance, and business sector. Therefore, Accounting regulators have required different form of reporting and disclosures depending on entities. That is to say, many regulators broadly enforce different reporting obligations to entities in the private and public sectors, while reporting requirements for entities which operate in not for profit sector are less developed. Such different reporting obligation might have brought related issues to entities and furthermore regulators. Because entities have concerned about significant costs relating considerable reporting and compliance. In additions, as getting into step with globalization, the international harmonization of reporting has been increasingly focused on though; regulators still have a tendency to develop different approaches to reporting requirements for entities with different aspects. With recognition of such complication, some accounting regulators have started to re-define and re-examine regarding differential reporting in order to overcome the difficulties...
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...IFRS vs. A- IFRS Australia along with New Zealand, The European Union, China and Russia was one of the earliest adopters of the IFRS. Australia adopted an IFRS equivalent which they call A-IFRS starting January 1, 2005. Even though, Australia and the IFRS have converged there are still some difference in the accounting practices allowed by Australian GAAP and the full IFRS. The differences between the two sets of standards are not as glaring as the differences between US GAAP and IFRS but the differences between the A-IFRS and IFRS are worth noting. The treatment of general insurance contracts and life insurance differs between the two standards. Australian firms must follow AASB 1023 and 1038 these standards are more specific than IFRS 4 which covers all insurance contracts and financial instruments with flexible participation features. AASB details all of the disclosure measurement and recognition requirements of accounting for general insurance contracts. AASB 1038 deals with life insurance contracts and is more specific than IFRS 4, it doesn’t allow “shadow accounting” which IFRS 4 does allow (Porter, 6). Shadow accounting has become popular because of outsourcing and is the checking and confirming aspects of a company’s accounting function on the managers behalf (Kaufman, 69). These slight differences do allow a company following the Australia equivalent to the IFRS does allow Australian firms to fully comply with the IFRS but it does lead to comparability problems. A...
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...reference elaboration point feel free to rephrase in your own style** enjoy your 30 seconds of glory MASB converged with IFRS in 2012 What is MASB’s future role after convergence with IFRS? (Jasmin) The importance of national standard setting bodies is again emphasised in the recent IFRS Foundation publication where the trustees had sought public comment of their strategy review for the next decade. It is stated in that consultative document that the IFRS Foundation and IASB should encourage the maintenance of a network of national and other accounting standard-setting bodies as an integral part of the global standard-setting process. National and other accounting standard-setting bodies should continue to undertake research, provide guidance on the IASB’s priorities, encourage stakeholder input from their own jurisdiction into the IASB’s due process and identify emerging issues. 1) Promote Regional collaboration ( Jasmin) The MASB actively participate in the activities of the Asian-Oceanian Standard-Setters Group (AOSSG), where Malaysia is one of the founding members. The composition of members of the AOSSG with countries such as Australia, China, Japan, Korea and India, to name a few, will endow with it a stronger voice to convey concerns and important feedback on issues from the Asian-Oceanian region to the IASB to improve future IFRS towards development of a single set of high quality international accounting standards. The AOSSG currently has 25 member...
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...2009 International Accounting Standards Board (IASB® ) IFRS for SMEs ® International Financial Reporting Standard (IFRS®) for Small and Medium-sized Entities (SMEs) International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) The International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) is issued by the International Accounting Standards Board (IASB), 30 Cannon Street, London EC4M 6XH, United Kingdom. Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: iasb@iasb.org Web: www.iasb.org The International Accounting Standards Committee Foundation (IASCF), the authors and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise. The IFRS for SMEs and its accompanying documents are published in three parts: ISBN for this part: 978-1-907026-17-1 ISBN for complete publication (three parts): 978-1-907026-16-4 Copyright © 2009 IASCF All rights reserved. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IASCF. International Financial Reporting...
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...Share Capital It is the amount of money contributed by the shareholders for the furtherance of objectives of the company for which it was created. * Equity / Preference Share * Par value * Number of Shares in each category * Total amount TYPES OF SHARE CAPITAL * AUTHORISED CAPITAL * ISSUED CAPITAL * SUBSCRIBED CAPITAL * CALLED UP CAPITAL * PAID-UP CAPITAL AUTHORISED CAPITAL * MAXIMUM amount of share capital that the company is authorised by its constitutional documents to issue to shareholders. * Part of the authorised capital can (and frequently does) remain unissued. * EXAMPLE: AS PER THE CONSTITUTIONAL DOCUMENT OF A NEW COMPANY ‘XYZ.LTD’ IT CAN ISSUE A TOTAL OF 10 LAKH SHARES OF RS 10 EACH FACE VALUE/PAR VALUE: IT IS THE FIXED DENOMINATION AT WHICH A COMPANY ISSUES ITS SHARES. THE FACE VALUE IS MENTIONED ON THE SHARE CERTIFICATE. ISSUED CAPITAL * THE PART OF AUTHORISED CAPITAL WHICH IS OFFERED TO THE PUBLIC FOR SUBSCRITION * EXAMPLE : * OUT OF 10 LAKH SHARES, COMPANY ‘XYZ LTD.’ ISSUES 7 LAKH SHARES OF RS 10 EACH SUBSCRIBED CAPITAL * PART OF ISSUED CAPITAL THAT IS APPLIED FOR BY PROSPECTIVE SHARE HOLDERS & ALLOTED BY THE COMPANY * UNSUBSCRIBED CAPITAL :BALANCE OF ISSUED CAPITAL NOT SUBSCRIBED BY THE PUBLIC * EXAMPLE : SITUATION 1: UNDERSUBSCRIPTION ‘XYZ LTD.’ GETS PROSPECTS FOR 6 LAKH SHARES SITUATION 2: OVERSUBSCRIPTION ‘XYZ LTD’ GETS PROSPECTS FOR 8 LAKH SHARES ...
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... The XRB have chosen to align New Zealand with Australia and implement NZ IFRS Reduced Disclosure Regime (RDR). Is this the right decision moving forward in differential reporting? There is to be a four-tier structure with different reporting standards applying to each tier, however the bottom two tier are only transitional which will be removed according to legislative changes enforced. This allows us to focus on tier 2 for differential reporting which in order to qualify for the new RDR approach entities must be not publicly accountable or non-large public sector entities which elect to be in tier 2. Entities that are publicly accountable either trade in the capital markets and/or holds assets for a broad group of outsiders as one of its primary businesses. For a for-profit public sector entity to be considered “large” and thus placed in tier 1, it must have expenses exceeding $30 million. Under the current approach to differential reporting that was issued in 1994, entities must; not be publicly accountable, have all of its owners as member of the governing body at the end of the reporting period, and be not large. The criteria for “large” is a little different being that entity must meet two of the following; total assets exceeds $10 million, total turnover exceeds $20 million, and have 50 or more employees. The other option was to align ourselves with the international approach with IFRS for SMEs. To qualify, entities must again not be publicly accountable and publish general...
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...Topic | AS | IFRS | Presentation of Financial Statements | AS1-Disclosure of Accounting Policies AS5-Net Profit or Loss for the Period , Prior Period Items and Changes in Accounting Policies | IAS1- Presentation of Financial Statements | | Entities preparing first financial statements in compliance with Indian GAAP are required to comply with all accounting standards. | Entities preparing first financial statements in compliance with IFRS apply optional exemptions and mandatory exceptions in IFRS1 to the retrospective application of IFRS. | | Non-compliance with accounting standards or the Companies Act is prohibited unless permitted by other regulatory framework. | IFRS may be overridden in extremely rare circumstances where compliance would be so misleading that it conflicts with the objective of financial statements set out in the IFRS framework and thus, departure is needed to achieve fair presentation. | | Entities meeting the conditions to qualify as Small and Medium Sized Company have certain exemption or relaxation in complying with the accounting standards. | IFRS for SMEs(Small and Medium Enterprises) is a self-contained set of accounting principles that are based on full IFRS, but that have been simplified to the extent suitable for SMEs. The IFRS for SME and full IFRS are separate and distinct frameworks. | | There is no requirement to make an explicit and unreserved statement of compliance with Indian GAAP in the financial statements. | Entities should...
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...1. Introduction Accounting standards establish the rules for accounting in a country and prescribe what should be reported in a company’s financial statements in that territory. Their purpose is to ensure that consistent approaches of accounting are adopted nationally. They minimize the risk of material misstatement in accounts and help investors make decisions by ensuring they can get comparable information. Accounting standards, as laid down by a country’s law, are applicable to all companies registered within its territory. But in order to ensure the success, the regulating process must be established. In Bangladesh BFRS and BAS are used as the accounting and reporting standards for the companies. Companies are obliged to follow those standards and laws and some are free from such restrictions. In this assignment, a theoretical analysis has been made regarding the accounting regulation and standard setting process in Bangladesh. 2. Accounting Regulation in Bangladesh All the companies in Bangladesh (both public limited companies and private limited companies) are regulated by The Companies Act of 1994 that provides the basic requirements for the companies. It includes the requirements about financial reporting and accounting practices. But most importantly, this act is silent about either Bangladesh Accounting Standards (BAS) or International Accounting Standards (IAS),. description about the laws and regulations for different types of entities in Bangladesh has been...
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...Advantages of IFRS compared to GAAP reporting standards 1.1 Focus on investors One of the significant advantages of IFRS compared to GAAP is its focus on investors in the following ways: 1. The first factor is that IFRS promise more accurate, timely and comprehensive financial statement information that is relevant to the national standards. And the information provided by financial statements prepared under IFRS tends to be more understandable for investors as they can understand the financial statement without the necessity of other sources which makes investors more informed 2. This also helps new or small investors by making the reporting standards simpler and better quality as it puts small and new investors in the same position with other professional investors as it was impossible under the previous reporting standards. This also helps to reduce the risk for new or small investors while trading as professional investors can not take advantage due to the simple to understand nature of financial statements. 3. Due to harmonization and standardization of reporting standards under IFRS, the investors do not need to pay for processing and adjusting the financial statements to be able to understand them, thus eliminating the fees of analysts. Therefore, IFRS reduces the cost for investors. 4. Reducing international differences in reporting standards by applying IFRS, in a sense removes a cross border takeovers and acquisitions by investors. Based on...
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...Accounting Standards Boards Carmen Morales ACC 541 Nov-12, 2012 Sonia Quintero Accounting Standards Boards The society has to follow all kind of laws, regulations, rules, or standards established by legal authorities. In accounting environment is not the exception. Two types of accounting standards boards are the ones that regulate accounting standards: the Financial Accounting Standard Board (FASB) and International Accounting Standard Board (IASB). These two boards will help us to ensure if the information is done properly and are reported in a consistent way so that investors can determine what company is better to invest in. First, there will be an explanation of the relationship between the two boards and the IASB equivalents of the FASB original pronouncements. Finally, there will be an explanation of how the MSA program prepares the student for a professional life within the accounting vocation. In 1971 the board of directors of the American Institute of Certified Public Accountants (AICPA) appointed two committees: the wheat and the trueblood committee. The purpose of the wheat committee was to study how financial accounting principles should be established. The purpose of the trueblood was to determine the objectives of financial statements (Schroeder, Clark, & Cathey, 2011). In 1972 the wheat committee recommended to abolish the Accounting Principles Board (APB) and the creation of the Financial Accounting Standard Board (FASB). The new board was going...
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...Financial statement The objective of the financial statements is to provide information for economic decisions. Multiple guidelines related to the presentation of financial statements, such as fair presentation, going concern, compliance with IFRS for SMEs, consistency, and comparative information, are shown in these sections. For IFRS for SMEs, a complete set of financial statements comprises a statement of financial position; either a single statement of comprehensive income or a separate income statement and a separate statement of comprehensive income; a statement of changes in equity; a statement of cash flows and explanatory notes. The IFRS for SMEs does not have a prescribed format for these statements; however, there is implementation guidance, which includes minimum line items, disclosures, and notes. The statement of financial position presents an entity’s assets, liabilities and equity at a specific time. Even though current assets, non-current assets, current liabilities, and non-current liabilities are presented as separate classification in the financial statement of financial position, the standard also allow liquidity-based approach if it is more reliable. For the statement of comprehensive income, it presents entity’s financial performance for the period of time. The management can choose either to present its income in one or two statements. The single statement approach presents all items of income and expense in the period, starting with revenues and...
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...IIE Module Guide ACCO230 ACCOUNTING 2A (DIPLOMA) MODULE GUIDE 2013 First edition: (2013) This manual enjoys copyright under the Berne Convention. In terms of the Copyright Act, no 98 of 1978, no part of this manual may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any other information storage and retrieval system without permission in writing from the proprietor. The Independent Institute of Education (Pty) Ltd is registered with the Department of Higher Education and Training as a private further and higher education and training institution under the Further Education and Training Colleges Act, 2006 (reg. no. 2009/FE07/003, prov. to 31/12/2014) and the Higher Education Act, 1997 (reg. no. 2007/HE07/002). © The Independent Institute of Education (Pty) Ltd 2013 - Page 1 of 82 IIE Module Guide ACCO230 DID YOU KNOW? Student Portal The full-service student portal provides you with access to your academic administrative information, including: an online calendar, timetable, academic results, module content, document reviews, financial account, and so much more. Module Guides or Manuals When you log into the Student Portal, the Module Information page displays “Module Purpose” and “Textbook Information” including online “Module Guides or Manuals” for each module for which you are registered. Supplementary Materials For certain modules, electronic supplementary material...
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...CHAPTER 2: REGULATION IN FINANCIAL ACCOUNTING Chapter 2 regulation in Financial accounting LEARNING OUTCOMES Upon completion of this chapter you should be able to understand: • The difference between management and financial accounting. • Why accounting regulations are important and required. • The need for and the structure of professional regulation, company law, stock exchange legislation and EU Directives. • How the different aspects of regulation work together and complement each other. • The process through which an accounting standard comes into being. REVISION RESOURCES EXAM QUESTIONS: Sample and Past papers are available from the website of Accounting Technicians Ireland and are essential aids when studying Advanced Financial Accounting topics. 7 Chapter 2 : Regulation in Financial Accounting 2.1 Advanced Financial Accounting the FunCtion oF FinanCial aCCounting and reporting The International Accounting Standards Board (IASB) in their Conceptual Framework for Financial Reporting state that ‘the objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit’. This Conceptual Framework...
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