The liberalization and globalization policies adopted by most of the countries have transformed the products and services from local standards to global ones and reduced the world into a global one.
As amongst these trends a recognized trend has been the acceptance of The International Financial reporting Standards (IFRS).
IAS/IFRS is a single set of high quality, global accounting standards. International Financial Reporting Standards comprise of:
- International Financial Reporting Standards (IFRS)
- International Accounting Standards (IAS)
- Interpretations from the International Financial Reporting Interpretations Committee (IFRIC)
- Standing Interpretations Committee (SIC)
Besides this, there is a “Framework for the Preparation and Presentation of Financial Statements”, which describes the principles underlying the IFRS.
In order to increase transparency as well to compare financial information across countries it has become mandatory for companies to adopt IFRS. IFRS was implemented by many countries and most of them had converged their national GAAP to IFRS. Throughout the world more than 100 countries have adopted the system, and this includes the 27 European Union states. The European Union adopted the guideline of IFRS in June 2002 which made it mandatory for all the 27 countries of European Union to adopt a consolidated financial statement in accordance with IFRS.