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Essay Available:
Pages:
2 pages/≈550 words
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Style:
Chicago
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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Topic:

First Time IFRS Adoption Essay Accounting, Finance, SPSS Essay

Essay Instructions:

Conduct your own research and provide a two-page essay on why adoption of IFRS 1 was met with controversy and how E&Ys (2019) good first-time adopter, presented its statement of financial position and what alternatives were available.
Explain one of the exemptions in detail for example: Compound financial instruments IAS 32 Financial Instruments: Presentation requires an entity to split a compound financial instrument at inception into separate liability and equity components. If the liability component is no longer outstanding, retrospective application of IAS 32 involves separating two portions of equity. The first portion is in retained earnings and represents the cumulative interest accrued on the liability component. The other portion represents the original equity component. However, under this IFRS, a first-time adopter need not separate these two portions if the liability component is no longer outstanding at the date of transition to IFRSs.

Essay Sample Content Preview:

IFRS Adoption
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IFRS refers to accounting standards that are put in place to ensure transparency and consistency in the presentation of financial data all over the world. The rollover for GAAPs to IFRS was associated with a lot of debate because of the changes' uncertainty. IFRS was said to have benefits that would include the adoption of consistency in reporting, an increase in global competition amongst corporates, and the upgrading of transparency in the reporting of financial matters. Regardless of the benefits associated with the adoption of IFRS, companies were hesitant to make the adoption because of several issues. Some of the problems include the use of fair value in the financial statements. The use of fair value is associated with a lot of subjectivity and volatility (Lasmin, 2011). The valuation may also require an expert's help to arrive at the correct valuation.
The other reason why companies were hesitant to make the change was the issue of costs of implementation. The evolution of the standards would include a shift in hardware and software. Companies would also incur charges in the training of their employees. The other reason behind the hesitance was the issue of costs against benefits associated with the rollover. There was uncertainty about whether the costs would be greater than the services or the other way around. The resistance to change was also another factor that led to the problems in the adoption of IFRS. Employees and people, in general, tend to rely more on their comfort zone. People ...
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