International Accounting Standards were established in 1973 and were later replaced by International Financial Reporting Standards in 2001 to provide a common set of global accounting standards. IFRS are now accepted in over 120 countries and aim to increase transparency and comparability of financial information across international borders. The standards are set by the International Accounting Standards Board and cover key aspects of financial reporting such as accounting elements, qualitative characteristics, objectives, and underlying assumptions. While IFRS adoption has costs, there are significant benefits for international trade, investment and comparability between global companies.

1. PRESENTED TO
MAM SEHAR MUNIR
PRESENTED BY
RAZIA HAMEED
2015-AG-194

2.  International Accounting Standards (IAS) were issued
between 1973 and 2001 by the Board of the International
Accounting Standards Committee(IASC).
 On 1 April 2001, the new International Accounting
Standards Board (IASC) took over from the IASC the
responsibility for setting International Accounting
Standards.
 The IASB has continued to develop standards calling the
new standards International Financial Reporting
Standards (IFRS).

3.  International Financial Reporting Standards
(IFRS) are designed as a common global language
for business affairs so that company accounts are
understandable and comparable across international
boundaries.
 The rules to be followed by accountants to maintain
books of accounts which is comparable,
understandable, reliable and relevant as per the
users internal or external.

4. • International Financial Reporting Standards is
shooting down the competition as it has been
accepted in more than 120 countries like
Finland , France , Germany , Australia , China ,
Pakistan , India and many more .
• A survey was done and it showed that more than
25,000 international and approximately 48,000
domestic listed companies in the world use IFRS
Standards.

5. • Expanding world trade
• Proliferation of multinational
corporations
• Increasing role of global capital
markets
• Increased FDI
• Growth of organizations

6.  Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital Maintenance Adjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materiality is an aspect of relevance.

7. • At the core of the Conceptual
Framework is the objective to
provide financial information
that is useful to current and
potential providers of
resources in making decisions.
• All other aspects of the
framework flow from that
central objective. Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

8. • Two fundamental qualitative
characteristics that make
financial information useful:
– Relevance: Information that
could potentially make a
difference in users’
decisions.
– Faithful Representation:
Information that faithfully
represents an economic
phenomenon that it purports
to represent. It is ideally
• complete,
• neutral, and
• free from error.
 Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

9. • Four enhancing qualitative
characteristics that make financial
information useful:
– Comparability: Companies record
and report information in a similar
manner.
– Verifiability: Independent people
using the same methods arrive at
similar conclusions.
– Timeliness: Information is available
before it loses its relevance.
– Understandability: Reasonably
informed users should be able to
comprehend the information.
 Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

10. • Elements directly related to the
measurement of performance:
– Income: Increases in
economic benefits in the
form of inflows or
enhancements of assets or
decreases of liabilities that
result in an increase in
equity
– Expenses: Decreases in
economic benefits in the
form of outflows or
depletions of assets or
increases in liabilities that
result in decreases in
equity
 Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

11. • Elements directly related to the
measurement of financial position:
– Assets: Resources controlled by
the enterprise as a result of past
events and from which future
economic benefits are expected to
flow to the enterprise.
– Liabilities: Present obligations of
an enterprise arising from past
events, the settlement of which is
expected to result in an outflow of
resources embodying economic
benefits.
– Equity: Residual interest in the
assets after subtracting the
liabilities.
 Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

12. • Constraint: The benefits of
information should exceed the
costs of providing it.
• Underlying Assumptions:
– Accrual Basis: Financial
statements should reflect
transactions in the period
when they actually occur, not
necessarily when cash
movements occur.
– Going Concern: Assumption
that the company will continue
in business for the foreseeable
future.
 Financial Position
o Assets
o Liabilities
o Equity
 Performance
o Income
o Expenses
o Capital MaintenanceAdjustments
o Past Cash Flows
o Reporting Ele
Reporting Elements
 Relevance*
 Faithful Representation
 Comparability, Verifiability,
Timeliness,
Understandability
Qualitative Characteristics
To Provide Financial Information
Useful in Making Decisions about
Providing Resources to the Entity
Objective
Constraint
 Cost (cost/benefit considerations)
Underlying Assumption
 Accrual Basis
 Going Concern
*Materialityis an aspect of relevance.

13. • Focus on Investors
• Loss recognition timeliness
• Comparability
• Standardization of accounting and financial reporting
• Improved consistency and transparency of financial
reporting.
• Better access to foreign capital markets and investments
• Improved comparability of financial information with
global competitors
• Relevance

14. • IFRS is quite complex and costly in case of
small or medium sized business.
• Initial cost of converting to IFRS is large
• Every country interpret IFRS on his own way.
• IFRS is effected by the country culture, language
and legal system.
• Investors has to understand the culture of the
country in which he wants to invests.
• Converting to IFRS makes the IASB the
monopolist in the terms setting the standards.

15. • Overall, there are more advantages to IFRS than the
disadvantages.
• The worlds economies are becoming more integrated
and having one accounting system will make life a little
less complicated for both the investors and company.
• As multinational businesses 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 of one global set of high quality accounting
standards and the IFRS is currently best positioned to
fulfill that need.