FINANCIAL ACCOUNTING
1)IFRS OVERVIEW
Drafted by a private entity.
Derived from UK GAAP that spreads across UK former colonies(USA;
AUSTRALIA; NEW ZEALAND; SOUTH AFRICA).
HISTORY:
In the 1980s a private foundation was incorporated in Delaware(US).
Investing globally was complicated because each nation had its own
sets of accounting standards. So a cross-border set of accounting rules
was created in the 1980s and started to be used 15 years afterwards.
WHY ADOPTING IFRS:
- Transparency=enhancing international comparability→ It’s built
for investors’ interests: investors need the most info possible since
they are risking their money.
- Accountability= reduces information gap between providers of
capital and people to whom they have given money.
- Efficiency=helps investors to identify opportunities and risks.
→Thanks to IFRS there is globalization. There would be no globalization
without a common set of accounting rules(no commercial transactions
internationally)=globalization started when IFRS started
spreading(1990s-2000s)
WHICH JURISDICTIONS ADOPT IFRS(IAS)
(table)
There are 166 jurisdictions adopting IFRS for public companies. There
are others also adopting IFRS for private companies
The USA never adopted IFRS. Because they are patriottici(they don’t
adopt something from outside of USA)
IFRS in ITALY:
-Adopted in 2005
-same situation about other EU countries
