Submitted by;

Pramod P
2nd M com
Roll no:21
CONTENTS
IFRS –meaning

Advantages of IFRS

Challenges of IFRS

Conclusion
 What is IFRS?

International Financial Reporting Standard (IFRS)is a set

of accounting standards developed by an independent ,not -
for-profit organization called the International Accounting
Standard Board(IASB).

IFRS is sometimes confused with international accounting

standards(IAS),which are older standard that IFRS has
now replaced.

The goal of IFRS is to provide global framework for how

public companies prepare and disclose their financial
statements.

IFRS provide general guidance for the preparation of

financial statements ,rather than setting rules for industry-
specific reporting.
OF IFRS
 To investors
Benefits in terms
of different
stakeholders

To industry To corporate
world

To economy
To accounting
professionals
Benefits to Financial and operational
transparency
investors
Better investment decisions

Increased confidence

Provide reliable information

Better understandability
To industry
 Improved financial reporting and tax planning

 Improved day to day operations

 Better managed resources

 Improved financial controls

 Lowered cost of capital

To accounting professionals
• Helps in marketing their expertise

• Better opportunities
To corporate
world
 Better reputation

 Higher level of consistency

 Better access to international

markets

 Improves competitive spirit

To economy
o Improves industrial growth

o Growth of capital market

o Better international relations

o Global accessibility
Drawbacks
of IFRS
Challenges  Need for regulatory amendments

 Difference in economic environment

 Lack of readiness

 Scarcity of resource pool

 Costly exercise

 Burden for small and medium

enterprises(SMEs)
Need for regulatory
amendments

The success of convergence

with IFRS depends upon;

 Amendment in national GAAP

 Amendment in legal framework

 Amendment of regulatory
issues
Difference in economic
environment

Differences in terms of;

 Business culture
 Economic conditions
 Values
 norms
Lack of readiness
 Resistance towards change

 IFRS is just an accounting issue

 Such issues are left to finance

managers and auditors
Scarcity of resource pool
 Lack of accounting professionals

 Company rely on external advisors and auditors

 Non availability of trained pool of resources

Costly exercise
Cost in terms of three
things;

 Time

 Money

 Effort
Burden for SME’s
Barriers for SME’s in terms of;

 Cost

 Shortage of resources

 expertise
CONCLUSION

 Just like a two sided coin IFRS consists of both positive

and negative impacts.

 Integration of world economies are possible through a
global set of standard which makes the business less
complicated.

 National resistance and initial cost are the two prime

factors which act as a barrier for IFRS and its adoption.

 As MNC’S continue to grow and expand , a thorough

knowledge of IFRS is now essential for internationally
active , growing businesses.

 There seems to be worldwide consensus surrounding the

need for one global set of high quality standard and that
IFRS is currently best positioned to fulfill that need.