The Drive to International Accounting Standards
A Primer to International Financial Reporting Standards (IFRS)
The move towards international accounting standards is being driven by globalization and the breaking down of national barriers. As the world’s capital markets have become more integrated, demand has increased for a uniform standard for financial statement presentation and disclosure. One set of high-quality accounting standards will improve transparency and support international investor relations. As well, companies acquiring other companies, and those being acquired, will be comparing apples to apples and speaking the same financial language.
IFRS is a single set of global accounting standards that require transparent and comparable information in general purpose financial statements. This set of standards has been developed by the International Accounting Standards Boards (IASB), based in London, England.
In Canada, the Canadian Accounting Standards Board (AcSB) has confirmed that IFRS will replace Canadian GAAP effective January 1, 2011, for “publicly accountable profit-oriented enterprises.” This means that these companies will need to restate statements under IFRS in their fiscal year 2010 in order to be able to file comparatives in 2011.
For more information on why small and midsized companies should care about IFRS, as well as the impact of IFRS on your accounting system, download and read the IFRS and Sage Accpac white paper.