In recent years, the applicable accounting standards for companies changed considerably.
Until the 1990s, the development of accounting standards was mainly a
national responsibility. In consequence, the standards were influenced by national
factors. Therefore, there was much divergence among domestic accounting standards.
Only in recent years, there is a strong trend to the convergence of domestic
accounting standards. The International Financial Reporting Standards (IFRS)
play a major role in this convergence process. The IFRS have influence on the
convergence process in two ways. On the one hand, some countries require the
use of IFRS or an adjusted version of IFRS for all domestic companies or for
segments of domestic companies, for example listed companies. On the other
hand, some countries converge their domestic accounting standards with IFRS. In
a survey of fifty-nine countries conducted by the major accounting firms in 2002,
90% of these countries confirmed that they intend to adopt or converge with
IFRS. One of the most important decisions in this convergence process was the
passing of a regulation by the commission of the European Union (EU) in 2002.
This regulation requires that all listed companies in the EU must present their
consolidated financial statements in accordance with IFRS for financial years beginning
on or after 1 January 2005.
What are the reasons for this convergence process? The main reason is that companies
and investors increasingly conduct their operations on a global scale, but
the legal and regulatory frameworks for their reporting activities remain country
based. So, the companies have to apply many different accounting standards for
the reporting of their subsidiaries in different countries. On the one hand this incurs
additional costs for multinational companies and on the other hand it is more
difficult for investors to compare investment opportunities globally.
The convergence of accounting standards reduces definitely the costs of multinational
companies. However it is not obvious, if financial reports in accordance
with IFRS of companies from different companies are really comparable. The International Accounting Standards Board (IASB) is responsible for the development
of IFRS. In order to get worldwide acceptance of IFRS, the IASB provides
many interest groups and countries the opportunity to participate in the standardsetting
process. [...]
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Influences on the IASB/IASC
- 2.1 General influences
- 2.2 Adoption of IAS by emerging economies
- 2.2 Agreement between IASB and IOSCO
- 2.3 Reorganization of the IASC
- 2.4 EU endorsement of IAS/IFRS
- 2.5 Convergence project of IASB and FASB
- 3 Previous development of IFRS
- 4 Overview of current IFRS accounting and valuation options
- 4.1 Distinction between different types of options
- 4.2 Choice between alternatives
- 4.3 Latitudes of judgement
- 5 Project idea
- 6 Selection of the sample
- 6.1 Parent population
- 6.2 Selection method
- 6.3 Composition of the selected sample
- 7 Selected accounting and valuation options
- 7.1 Presentation of financial statements (IAS 1,7,30)
- 7.1.1 General requirements for financial statements
- 7.1.2 Balance sheet
- 7.1.2.1 Rules
- 7.1.2.2 Empirical results
- 7.1.2.3 Judgement of the results
- 7.1.3 Income statement
- 7.1.3.1 Rules
- 7.1.3.2 Empirical results
- 7.1.3.3 Judgement of the results
- 7.1.4 Statement of changes in equity
- 7.1.4.1 Rules
- 7.1.4.2 Empirical results
- 7.1.4.3 Judgement of the results
- 7.1.5 Cash flow statement
- 7.1.5.1 Rules
- 7.1.5.2 Empirical results
- 7.1.5.3 Judgement of the results
- 7.1.6 Notes
- 7.2 Inventories (IAS 2)
- 7.3 Property, plant and equipment (IAS 16)
- 7.4 Government grants (IAS 20)
- 7.5 Borrowing costs (IAS 23)
- 7.6 Investment property (IAS 40)
- 7.1 Presentation of financial statements (IAS 1,7,30)
- 8 Outlook on current and future developments
- 8.1 General outlook
- 8.2 Current projects affecting analysed IFRS
- 8.2.1 Project “Financial statement presentation” (IAS 1)
- 8.2.2 Project “Government grants” (IAS 20)
- 8.2.3 Project “Borrowing costs” (IAS 23)
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master's thesis aims to conduct a cross-country and cross-sector study of selected IFRS accounting and valuation options. The research analyzes the application of these options in practice and compares the results across different countries and sectors.
- Application of IFRS accounting standards across various sectors and countries.
- Analysis of variations in the application of IFRS accounting options.
- Comparison of empirical results with theoretical rules and guidelines.
- Identification of areas where judgement plays a significant role in IFRS application.
- Outlook on current and future developments in IFRS.
Zusammenfassung der Kapitel (Chapter Summaries)
1 Introduction: This chapter provides a brief introduction to the topic of the thesis, outlining the scope and objectives of the research. It sets the stage for the subsequent chapters by highlighting the importance of understanding the application and interpretation of IFRS accounting standards in diverse contexts.
2 Influences on the IASB/IASC: This chapter examines the various factors influencing the development and adoption of International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). It explores the roles of different organizations such as IOSCO and the EU, as well as the impact of global economic conditions and the convergence efforts between IASB and FASB. The analysis delves into how these factors have shaped the evolution and current state of IFRS, highlighting the political and economic pressures that influence the development of accounting standards.
3 Previous development of IFRS: This chapter traces the historical development of IFRS, providing context for the current standards. It illustrates the evolution of accounting practices and standards, emphasizing key milestones and changes that led to the current IFRS framework. This historical perspective is crucial for understanding the nuances of current standards and their ongoing development.
4 Overview of current IFRS accounting and valuation options: This chapter provides a comprehensive overview of the current IFRS accounting and valuation options available to companies. It distinguishes between various types of options and clarifies the decision-making processes involved in choosing between these alternatives. The discussion encompasses the areas where professional judgment plays a crucial role in applying the standards.
5 Project idea: This chapter details the research methodology employed in the thesis, explaining the selection of the sample and the specific accounting and valuation options investigated. The rationale behind the choices made is clearly articulated, establishing the foundation for the subsequent empirical analysis.
6 Selection of the sample: This chapter thoroughly describes the process of selecting the sample used for the empirical study. It defines the parent population, outlines the selection method used, and explains the composition of the final sample. A detailed explanation of the sampling process is provided, ensuring the validity and reliability of the empirical findings presented in subsequent chapters.
7 Selected accounting and valuation options: This chapter presents an in-depth analysis of several specific IFRS accounting and valuation options, examining their application across various countries and sectors. The analysis includes a detailed examination of the relevant rules, a presentation of empirical results, and a critical evaluation of these results. The chapter examines the presentation of financial statements, inventories, property, plant and equipment, government grants, borrowing costs, and investment property.
8 Outlook on current and future developments: This chapter offers insights into the expected future developments of IFRS, considering the impact of ongoing projects on the accounting standards examined in the study. It provides a perspective on how the IFRS framework is likely to evolve and adapt to changing global economic conditions and business practices.
Schlüsselwörter (Keywords)
IFRS, accounting standards, valuation options, cross-country study, cross-sector analysis, empirical research, financial statements, inventories, property, plant and equipment, government grants, borrowing costs, investment property, IASB, IAS, IOSCO, FASB, convergence.
Frequently Asked Questions: A Comprehensive Language Preview of IFRS Accounting and Valuation Options
What is the purpose of this document?
This document provides a comprehensive preview of a master's thesis analyzing the application of selected International Financial Reporting Standards (IFRS) accounting and valuation options across different countries and sectors. It includes a table of contents, objectives and key themes, chapter summaries, and keywords.
What are the key themes explored in the thesis?
The thesis investigates the application of IFRS accounting standards across various sectors and countries, analyzes variations in their application, compares empirical results with theoretical rules, identifies areas where judgment significantly impacts IFRS application, and offers an outlook on current and future developments in IFRS.
Which IFRS standards are specifically analyzed?
The thesis focuses on several key IFRS standards, including IAS 1 (Presentation of Financial Statements), IAS 2 (Inventories), IAS 16 (Property, Plant and Equipment), IAS 20 (Government Grants), IAS 23 (Borrowing Costs), and IAS 40 (Investment Property). The analysis delves into specific aspects of these standards such as balance sheet, income statement, statement of changes in equity, and cash flow statement presentation.
What is the methodology used in the thesis?
The thesis employs a cross-country and cross-sector study design. It details the selection of a sample, outlining the parent population, selection method, and composition of the final sample. The research involves comparing empirical results obtained from the sample with the theoretical rules and guidelines provided by the relevant IFRS standards.
What are the main influences on the IASB/IASC discussed in the thesis?
The thesis examines several key influences on the International Accounting Standards Board (IASB) and its predecessor, the International Accounting Standards Committee (IASC). This includes general influences, adoption of IAS by emerging economies, agreements between IASB and the International Organization of Securities Commissions (IOSCO), the IASC reorganization, EU endorsement of IAS/IFRS, and the convergence project of IASB and the Financial Accounting Standards Board (FASB).
What is the historical development of IFRS covered in the thesis?
A chapter is dedicated to tracing the historical development of IFRS, providing context for the current standards and illustrating the evolution of accounting practices and standards, highlighting key milestones and changes that led to the current IFRS framework.
How does the thesis address the role of judgment in IFRS application?
The thesis explicitly identifies and analyzes areas where professional judgment plays a crucial role in the application of IFRS standards. This analysis is incorporated into the examination of specific accounting and valuation options, comparing the theoretical framework with practical application and results.
What is the outlook on current and future developments in IFRS?
The thesis concludes with a chapter providing insights into expected future developments of IFRS, considering the impact of ongoing projects (such as those related to financial statement presentation, government grants, and borrowing costs) on the accounting standards examined in the study.
What are the keywords associated with this thesis?
IFRS, accounting standards, valuation options, cross-country study, cross-sector analysis, empirical research, financial statements, inventories, property, plant and equipment, government grants, borrowing costs, investment property, IASB, IAS, IOSCO, FASB, convergence.
- Quote paper
- Markus Kraus (Author), 2006, Applicaton of selected IFRS accounting and valuation options, Munich, GRIN Verlag, https://www.grin.com/document/186337
