Issue International Accounting Standards †Myassignmenthelp.Com

Question: Discuss About The Issue International Accounting Standards? Answer: Introduction International Accounting Standard Board was previously known as International Accounting Standard Committee before April 2001 (Iasplus.com, 2017). It was established in 1973 and was the complete authority to issue international accounting standards. In 2001 international financial reporting also came into its ambit (Ifrs.org, 2017). It has amended many of the old standards and started making new ones by itself which came to be known as International Financial Reporting Standards (IFRS). IASB is set up as Monitoring Board at the top to approve and oversee trustees followed by IFRS Foundation containing 22 trustees (Ifrs.org, 2017). The next layer contains IFRS Advisory Council, IASB and IFRS Interpretations Committee. And at last it has its Working Groups. Discussion about IASB and Its Goal IASB Framework is deployed for making financial statements and business (Iasplus.com, 2017). The main goal of IASB Framework is to provide guidance and support to the IASB in the development of revised and renewed standards of financing and mitigating the issues which crop up in making financial statements which cannot be addressed by the accounting standards. IASB has full discretion in developing and pursing the technical aspects of Standards with consultation with the trustees (Iasplus.com, 2017). It has to prepare and issue the IFRS and even exposure drafts using the guidelines given in the Constitution. It also issues and approves the Interpretations made by the IFRS Interpretation Committee. IASB is known to be associated with the stakeholders closely all across the world (Iasplus.com, 2017). Its goals are to have universal reception of a group of international financial reporting standards, to fulfill the standard-setting work through a transparent and open process with public ation of documents such as exposure drafts and discussion papers. What is conceptual framework? In financial reporting Conceptual Framework is basically a theory of accounting compiled by the standard making bodies such as IASB against which the problems which are faced in practicality can be tested and tackled objectively (Iasplus.com, 2017). It is also known as Concepts Statements which is defined as body of interrelated fundamentals and objectives. Identification is done by objectives of the aims and goals of the financial reporting and fundamentals help to achieve those objectives (Zhang Andrew, 2014). A conceptual framework deals with the basic issues of Financial Reporting and contains the characteristic that makes information of accounts useful such as assets, liabilities, expenses, equity and income. This information assist in selecting the transactions, circumstances and events to be accounted for and the method of their recognition, measurement and the format of summary and report in which will be presented (Zhang Andrew, 2014). It can be stated that it is an analyt ical tool with much options and variations at its disposal to make organized distinctions and frame ideas for accounting standards. Why is conceptual framework required? In the context of financial reporting, conceptual framework includes establishment of exact definitions that helps in financial discussions of the issues of accounting. It provides guidance required by the makers of accounting standards when they review and develop rules of financial reporting (Eccles, Rogers Serafeim, 2012). They establish the fact that reporting standards are consistent internally. They help the auditors to mitigate financial reporting problems in where there are no accounting standards for a particular issue. The most important assistance is to decrease the number of accounting standards by giving an overarching theory which may be applied to all accounting standards to solve specific reporting problems. Only FASB is not benefited by the Conceptual Framework. It enhances the credibility of financial reporting when the objectives and fundamentals are used to establish the rules of reporting (Doukakis, 2014). It helps in the operations of standards that are not onl y internally consistent but are also consistent externally. It also helps in understanding the limitations of financial standards of reporting so that the issue does not go beyond the scope of a standard. Issues dealt with the conceptual framework. Exposure Draft of IASB mentions issues that are there in the conceptual framework which makes it a bit tainted. Exposure Draft proposes some of the solutions or changes which are to be made in the existing Conceptual Framework for issue mitigation (DeFond, Hung Li, 2014). ED proposes that the definitions of essentials in financial statements should be revised, derecognition and guidance should be included in the framework. The discussions should be held on the bases of measurement, principles should be made for incorporating items in Other Comprehensive Income (OCI) which are to be related with performance reporting and high level concepts of disclosure and presentation should be revised (Iasplus.com, 2017). Issues covered by IASB in its ED are: Requirement of General Purpose Financial Reporting (GPFR) Qualitative feature of valuable financial information Reporting entities of GPRF Fundamentals of Financial Statements Recognition and de-recognition Measurement Disclosure and Presentation Concepts of Capital and Capital Maintenance Evaluate the role of the conceptual framework plays in the development of IFRSs and IASs Conceptual framework may provide the preparers with a fallback provision for much needed judgment for the development and application of any accounting policy (Iasplus.com, 2017). This issue is discussed separately in IAS 8, which allows the Framework to have an authoritative body to guide the preparers to keep in mind the definitions, criteria of recognition and concepts of measurement such as assets, liabilities, expenses and income in the framework if other guidelines are absent (Iasplus.com, 2017). Conceptual Framework is extended to discuss the presentation, reporting entity and disclosures and it needs to be addressed that these new chapters will be included in IAS 8 or not (Iasplus.com, 2017). It can be said that Conceptual Framework plays a pivotal role in making rules and standards for IFRSs and IASs (Ifrs.org, 2017). Conclusion From the above discussion, it can be concluded that Conceptual Framework has been a guiding light in making the financial and accounting standards at international level since last few decades. It has helped the policy makers and experts to come out of the issues where there was no accounting standard to help them out. It covers almost all the issues related to financial reporting taking the issue holistically into its ambit. It provides solution to almost each problem faced in standard making. Conceptual Framework needs to be revised from time to time to be updated as per the changing needs of accounting and financial reporting. Reference Barker, R., Lennard, A., Nobes, C., Trombetta, M., Walton, P. (2014). Response of the EAA financial reporting standards committee to the IASB discussion paper A review of the conceptual framework for financial reporting.Accounting in Europe,11(2), 149-184. Barth, M. E. (2013). management in financial reporting: The need for concepts.Accounting Horizons,28(2), 331-352. Bertoni, M., De Rosa, B. (2013). Comprehensive income, fair value, and conservatism: A conceptual framework for reporting financial performance. DeFond, M. L., Hung, M., Li, S., Li, Y. (2014). Does mandatory IFRS adoption affect crash risk?.The Accounting Review,90(1), 265-299. Doukakis, L. C. (2014). The effect of mandatory IFRS adoption on real and accrual-based earnings management activities.Journal of Accounting and Public Policy,33(6), 551-572. Eccles, R. G., Krzus, M. P., Rogers, J., Serafeim, G. (2012). The need for sector?specific materiality and sustainability reporting standards.Journal of Applied Corporate Finance,24(2), 65-71. Iasplus.com. (2017).International Accounting Standards.Iasplus.com. Retrieved 12 September 2017, from https://www.iasplus.com/en/standards/ias Ifrs.org. (2017).IFRS.Ifrs.org. Retrieved 12 September 2017, from https://www.ifrs.org Zhang, Y., Andrew, J. (2014). Financialisation and the conceptual framework.Critical perspectives on accounting,25(1), 17-26.