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IFRS (International Financial Reporting Standards)

Discussion in 'Oracle Financials' started by shrikantgarud, Feb 3, 2012.

  1. shrikantgarud

    shrikantgarud Forum Advisor

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    What is IFRS?

    IFRS, International Financial Reporting Standards (IFRS), together with International Accounting Standards (IAS), are a "principles-based” set of standards that establish broad rules rather than dictating specific accounting treatments. From 1973 to 2001, IAS were issued by the International Accounting Standards Committee (IASC). In April 2001 the International Accounting Standards Board (IASB) adopted all IAS and began developing new standards called IFRS.
    IFRS are used in many parts of the world, including the European Union, Hong Kong, Australia, Russia, South Africa, Singapore and Pakistan. Nearly 100 countries currently require or permit the use of, or have a policy of convergence with, IFRSs. Here is list of countries which adopted IFRS.

    What is meant IFRS for Oracle eBusiness consultant/ERP Consultant?

    As we are quite aware GAAP which is so called Generally Accepted Accounting Principles for Shareholder Reporting.The term is not drafted by a legislature. and ,in term of Accounting Principles this can be best understood as:

    IFRS = Financial Reporting standards = Balance Definitions

    which internally means more in term of "disclosure Requirements" and "Balance Definitions " for finance controller.

    IFRS - What it is for?

    The Other things IFRS would do is:
    • Providing a bookkeeping rules rather many of us have impression that they have some rule set for accounting
    • It will do Shareholder Reporting , and this is important when :
    o A group of companies owned by a Public company
    o Not the individual companies
    • It will also do external reporting
    o To your owners (investors, shareholders)
    o Through their stock markets
    • Management Reporting
    o Maximize investors returns, measured only with IFRS
    o Segment Reporting disclosure

    IFRS - What it is not for?

    And more important it should be understand that IFRS is not meant for:
    • Statutory Reporting
    • Tax Reporting
    • Regulatory reporting
    • Subsidiary reporting

    IFRS -“How new is it?

    • IASB has been around since 1980
    • IAS/IFRS pretty much converged with the Americans
    • If your ERP supports US GAAP, it supports IAS/IFRS
    • Key premises (recognition, measurement):
    o Mark to Market when possible
    o Reality of the Balance Sheet – real assets, real liabilities
    o Income Statement analyses the change in wealth
    o Deep Disclosure: owners right to know

    US GAAP vs. IFRS - A difference
    While looking to some more information on internet ,I discovered a nice article from the site of Fulcrum Inquiry who pointed out the key differences(adopted) between the two standards

    Ramji and Sadik like this.
  2. Ramji

    Ramji Forum Guru

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    Good One M8.

    May I add from the context of Oracle it is FASB Compliant. Hence u need to know the above from an accountants perspective rather than a systems perspective.

    Each and every check box in Oracle is logical and complies. For eg Calculation of Exhange gains and Loss FASB 8 and 53 from the top of my head on day to day transactions.

    Their regional patches takes care of the subtle differences between domiciles. Their localizations are also geared towards the same objective.

    Thanks and B.Rgds