INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Question 1

Accounting standardization

Answer 1

• Process that pursues uniform accounting methods and practices for the preparation of the accounting information of companies, at the national level, facilitating its comparability.

Among its most outstanding objectives are:

• give guidelines to providers of accounting information on how they should prepare it
• guide the auditor in verifying the accounting information
• provide users with criteria on how the accounting information has been prepared

Question 2

International accounting harmonization

Answer 2

• Internationally, the accounting harmonization searches for uniform criteria that allow the approach of the accounting standards from different countries

This is mainly due to the following issues:

• Financial markets, in a increasingly globalized context, need accounting information, which is generally prepared with different standards in each country
• Growth in international business request accounting information among companies
• Multinational companies are the main interested in harmonization. Companies belonging to the same holding must prepare consolidated financial statements with homogenous criteria

Question 3

International accounting

Answer 3

Set of international activities designed for accounting harmonization, with the sole purpose of facilitating comparability of financial information.

Question 4

International accounting standard board- IASB (London, UK)

Answer 4

• Created by the world´s most representative professional bodies issuing accounting standards, including the European Commission

It has been created to:

• Put into service a set of unique and international accounting standards facilitating the comparability of the accounting information
• Work together with national bodies in different countries to achieve cohesion in accounting standards worldwide

Question 5

International financial reporting standards (IFRS)

Answer 5

• In the 1990s, increasing globalization accelerated the push for international standards and IASB became responsible for developing IFRS
• Used in over 100 countries around the world, including the countries in the EU, Brazil, Australia, Canada, etc.
• Counting standards ant to assist preparers of financial statements when there are no standards for guidance

Question 6

Conceptual framework:

Answer 6

It provides a basis for preparing and presenting financial statements. Its purpose is to provide a structure for creating new accounting standards ant to assist preparers of financial standards when there are no standards for guidance.