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IFRS Implementation

International Financial Reporting Standards (IFRS) are quickly getting momentum with global acceptance. The world is assessing these standards, and their potential implications and benefits have been recognised, including economics, banks, insurance, investment, real estate, and other multiple sectors. Companies are hugely benefited from IFRS because the investors and financial institutions are more likely to put money into a company if the companies’ business practices are transparent. With the advent of the global economy, IFRS implementation services have played a significant role in meeting financial reporting requirements.

The implementation of IFRS advisory services in Dubai a principle-based set of standards. The sole idea is not to just change the accounting policies. Still, also companies, regulators, and auditors need to adapt to accounting reporting and financial reporting, which will require judgment and less compliance of reliance on detailed rules. Companies need to evaluate the objective and basic principles regarding the making of decisions and their application.

IFRS implementation guidance sometimes gets confused with IAS (International Accounting Standards), an older standard than IFRS. So, let us look into the four stages that IFRS implementation involves:

  • Impact Assessment
  • Planning and Designing
  • Realisation
  • Data Conversion
  • During the IFRS implementation in Dubai, the company needs to decide whether at every sub-account level data conversion is required or at the general ledger level. Also, the parent company must create separate account reports for each of its subsidiary companies as well.

     

    IFRS implementation impacts asset accounting, revenue recognition working capital or capital expenditure company’s budgeting and planning policies, the planning and budgeting will also be revised accordingly.

IFRS is designed to bring consistency to accounting languages, practices, and statements and let the businesses and investors make educated financial and analytical decisions.

IFRS covers a vast range of accounting activities, which are:

  • Statement of Financial Position: IFRS influences how the components of a balance sheet are reported.
  • Statement of Cash Flow: Cash flow summarises the company’s financial transaction in the given period, separating cash flow into Operating, Investing and, other financing activities.

Though it is challenging to implement high-quality reporting standards if planned and managed correctly, its conversion can establish substantial improvements in the performance of the financial function, enhance control, and also helps in reducing the cost as it affords:

 

  • Cash management improvement.
  • Setting the standard and improving financial and accounting reporting policies.
  • Achieving efficiency and availability of resources.
  • Enhancing control and transparency of financial reporting.
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The goal of IFRS is to make international comparisons as easy to understand as possible. The idea of having a centralised system of accounting hasn’t been realised fully yet as the USA is using GAAP and some other countries use other standards. Also, U.S GAAP is different from Canadian GAAP.

In the international accounting community synchronising accounting standards around the globe is still in progress.

 

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