European Journal of Business and Management www.iiste.

org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

)'
Compliance of IFRS 7: A Study on the State Owned Specialized
Banks of Bangladesh
Md. Jo*air
1
(Md. Ismail +ossain
2
(Md. ,a-ssar ./med
10

1.1e2turer( 3epartment of Business .dministration( Banglades/ Islami 4ni5ersit-( #9612( 7.,. Mission 7oad
Mani8nagar Biswa 7oad( 3/a8a-120$
2..ssistant !rofessor( 3epartment of Business .dministration( Banglades/ Islami 4ni5ersit-( #9612( 7.,.
Mission 7oad( Mani8nagar Biswa 7oad( 3/a8a-120$
0 E-mail of t/e 2orresponding aut/or9 md8a-ssara/med:gmail.2om

Ast!act
;/is stud- is aimed to s2rutini<e t/e e=isting reporting standard for t/e Spe2iali<ed Ban8s of Banglades/ and
find out t/e e=tent of 2omplian2e *- t/em. ;o find out t/e degree of 2omplian2e t/e stud- /as gone t/roug/ t/e
>inan2ial 7eports of t/e entire sample Ban8s. &er- naturall-( it is /oped t/at all of t/em are re?uired to 2ompl-
t/e standard to up/old t/e s/are/older@s interest. 7e2ogni<ing t/is aspe2t some spe2ifi2 I>7Ss International
>inan2ial 7eporting Standards" /a5e *een pres2ri*ed for reporting to outsiders. %ne of w/i2/ important standard
I>7S A B >inan2ial Instruments9 3is2losures" w/i2/ was formulated *- I.SB in 2005 and o*liged to 2ompl-
from on after 1
st
Januar-( 200B. ;/e Institute of C/artered .22ountants of Banglades/ IC.B" pres2ri*ed to form
on or after 1
st
Januar-( 2010 in Banglades/. Consider t/e importan2e of t/is standard se2uriti<ation /as *een
2ondu2ted on si= Spe2iali<ed Ban8s of Banglades/.. ;/e result of t/e stud- s/ows t/at all of t/e Spe2iali<ed
Ban8s 2omplian2e almost 55D of t/e I>7S A B re?uirements. >inall- t/is stud- re2ommend on t/e degree of
2omplian2e for t/e Spe2iali<ed Ban8s finan2ial reporting.
"eywo!ds: Complian2e( I>7S( Ban8( Spe2iali<ed Ban8s(
#$ Int!oduction
;/e word bank was *orrowed in Middle Englis/ from Middle >ren2/ banque( from %ld Italian banca( from %ld
+ig/ Eerman banc, bank F*en2/( 2ounterF. Ben2/es were used as des8s or e=2/ange 2ounters during t/e
7enaissan2e *- >lorentine *an8ers( w/o used to ma8e t/eir transa2tions atop des8s 2o5ered *- green ta*le2lot/s
1
.%ne of t/e oldest items found s/owing mone--2/anging a2ti5it- is a sil5er Eree8 dra2/m 2oin from an2ient
+elleni2 2olon- ;rape<us on t/e Bla28 Sea( modern ;ra*<on( C( $50G$25 BC( presented in t/e Britis/ Museum
in 1ondon. ;/e 2oin s/ows a *an8erHs ta*le trapeza" laden wit/ 2oins( a pun on t/e name of t/e 2it-. In fa2t(
e5en toda- in Modern Eree8 t/e word ;rape<a " means *ot/ a ta*le and a *an8
2
. Ban8ing in t/e
modern sense of t/e word 2an *e tra2ed to medie5al and earl- 7enaissan2e Ital-( to t/e ri2/ 2ities in t/e nort/
li8e >loren2e( 1u22a( Siena( &eni2e and Eenoa. ;/e Bardi and !eru<<i families dominated *an8ing in 1)t/
2entur- >loren2e( esta*lis/ing *ran2/es in man- ot/er parts of Europe. %ne of t/e most famous Italian *an8s was
t/e Medi2i Ban8( set up *- Eio5anni di Bi22i deH Medi2i in 1$9B. ;/e earliest 8nown state deposit *an8( Ban2o
di San Eiorgio Ban8 of St. Eeorge"( was founded in 1)0B at Eenoa( Ital-.

;/e oldest *an8 still in e=isten2e is
Monte dei !as2/i di Siena( /ead?uartered in Siena( Ital-( w/i2/ /as *een operating 2ontinuousl- sin2e 1)B2.
Beren*erg Ban8 of +am*urg 1590" and S5eriges 7i8s*an8 of Sweden 1''#" followed it. . *an8 is a finan2ial
institution and a finan2ial intermediar- t/at a22epts deposits and 2/annels t/ose deposits into lending a2ti5ities(
eit/er dire2tl- *- loaning or indire2tl- t/roug/ 2apital mar8ets. . *an8 is t/e 2onne2tion *etween 2ustomers t/at
/a5e 2apital defi2its and 2ustomers wit/ 2apital surpluses. 3ue to t/eir influen2e wit/in a finan2ial s-stem and
t/e e2onom-( *an8s are /ig/l- regulated in most 2ountries.
1. .l*u?uer?ue( Martim 1#55". Notes and Iueries. 1ondon9 Eeorge Bell. p. )$1.
2. Ban8 G Ji8ipedia( t/e free en2-2lopedia
Ban8ing in its modern sense e5ol5ed in t/e 1)t/ 2entur- in t/e ri2/ 2ities of 7enaissan2e Ital- *ut in man- wa-s
was a 2ontinuation of ideas and 2on2epts of 2redit and lending t/at /ad its roots in t/e an2ient world. In t/e
/istor- of *an8ing( a num*er of *an8ing d-nasties /a5e pla-ed a 2entral role o5er man- 2enturies. ;/e oldest
e=isting *an8 was founded in 1)B2. Now-a-da-s( *an8ing industr- is t/e most flouris/ing as well as t/e most
2ontri*uting se2tor of an- e2onom-. Ban8ing is t/e ner5e 2entre of an e2onom-. Ban8ing 2an *e termed as one
of t/e primiti5e *usiness t/oug/ its institutional loo8 is not so old. Ban8ing se2tor is t/e dri5ing for2e of an-
2ountr- for its sustaina*le de5elopment. It is more t/an trut/ for a de5eloping 2ountr- li8e ours. .fter t/e
independen2e( *an8ing industr- in Banglades/ started its Kourne- wit/ ' nationali<ed 2ommer2iali<ed *an8s( 2
State owned spe2iali<ed *an8s and $ >oreign Ban8s. In t/e 19#0Hs *an8ing industr- a2/ie5ed signifi2ant
e=pansion wit/ t/e entran2e of pri5ate *an8s. Now( *an8s in Banglades/ are primaril- of two t-pes9 S2/eduled
Ban8s9 ;/e *an8s( w/i2/ get li2ense to operate under Ban8 Compan- .2t( 1991 .mended in 200$" are termed
as S2/eduled Ban8s. Non-S2/eduled Ban8s9 ;/e *an8s( w/i2/ are esta*lis/ed for spe2ial and definite o*Ke2ti5e
and operate under t/e a2ts t/at are ena2ted for meeting up t/ose o*Ke2ti5es( are termed as Non-S2/eduled Ban8s.
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

)B
;/ese *an8s 2annot perform all fun2tions of s2/eduled *an8s. ;/ere are 52 s2/eduled *an8s in Banglades/ w/o
operate under full 2ontrol and super5ision of Banglades/ Ban8( w/i2/ is empowered to do so t/roug/
Banglades/ Ban8 %rder( 19B2 and Ban8 Compan- .2t( 1991. S2/eduled Ban8s are 2lassified into following
t-pes9
State Owned Comme!cial Banks %SOCBs&9 ;/ere are four S%CBs( w/i2/ are full- or maKorl- owned
*- t/e Eo5ernment of Banglades/. ;/ese nationali<ed Commer2ial Ban8s are Sonali Ban8 1imited(
.grani Ban8 1imited( Janata Ban8 1imited and 7upali Ban8 1imited. Sour2e9 Banglades/ Ban8
%nline"
Specialized Banks %S'Bs&: Si= State owned spe2iali<ed *an8s are now operating w/i2/ were
esta*lis/ed for >inan2e of t/e Banglades/ Eo5ernment spe2ifi2 o*Ke2ti5es li8e agri2ultural or industrial
de5elopment. ;/e Eo5ernment of Banglades/ also full- or maKorl- owns t/ese *an8s. Sour2e9 %nline
of Ban8 and finan2e 3i5ision under Ministr- of >inan2e"
(!i)ate Comme!cial Banks %(CBs&9 ;/ere are total $0 pri5ate 2ommer2ial *an8s( w/i2/ are maKorl-
owned *- t/e pri5ate entities. Sour2e9 Banglades/ Ban8 online"
!CBs 2an *e 2ategori<ed into two groups9
Con)entional (CBs: 2# 2on5entional !CBs are now operating in t/e industr-. ;/e- perform t/e
*an8ing fun2tions in 2on5entional fas/ion i.e. interest *ased operations. Sour2e9 Banglades/ Ban8
online"
Islamic Sha!iah ased (CBs: ;/ere are se5en Islami S/aria/ *ased !CBs in Banglades/ and t/e-
e=e2ute *an8ing a2ti5ities a22ording to Islami S/aria/ *ased prin2iples i.e. !rofit-1oss S/aring !1S"
mode. Sour2e9 Banglades/ Ban8 online"
Fo!eign Comme!cial Banks %FCBs&: Nine >CBs are operating in Banglades/ as t/e *ran2/es of t/e
*an8s w/i2/ are in2orporated in a*road. Sour2e9 Banglades/ Ban8 online"
Banglades/i people@s parti2ipation in t/e industrial se2tor is in2reasing now da-s. ;otal wor8 for2e in
Banglades/ is 5 2rore fort- one la8/. %ut of t/e total wor8for2e( people are engaged in .gri2ulture )B.$0D(
Industr- 1B.')D and in ser5i2e se2tor $5.0'D. Industr- and ser5i2e *usiness altoget/er 2o5er 52.B0D wor8for2e
engagement in wor8ing Sour2e9 Banglades/ E2onomi2 Sur5e- 201$". >or t/is industrial wor8 a22omplis/ment(
t/ere are needs of *an8ing support. ;/erefore( Ban8ing institutions are in2reasing da- *- da-. ;/e esta*lis/ment
of Commer2ial Ban8ing se2tor in Banglades/ is t/e true refle2tion of t/is inner urge of its people. ;/erefore(
2omplian2e of re?uired laws and regulations are 2ompulsor- for t/em. +ere lies t/e maKor 2lue for t/e
2omplian2e of a22ounting standard. Ban8s and ot/er similar finan2ial institutions are different from ot/er
*usiness entities. ;o dis2lose t/e finan2ial performan2e and finan2ial position of t/is t-pe of finan2ial institutions(
regulator- wat2/dogs pres2ri*ed different te2/ni?ues. %ne of su2/ te2/ni?ues is to 2ompl- wit/ t/e appli2a*le
reporting standard su2/ as I>7S B International >inan2ial 7eporting Standard B". ;/oug/ not mandator-(
2omplian2e of I>7S aims at fait/ful representation of finan2ial performan2e and finan2ial position of an entit-.
In spite of *eing flouris/ing and maKor se2tor prior( wor8 on 2omplian2e wit/ I>7S B s/ows a ?uestiona*le
2on2lusion as to t/e degree of 2omplian2e. Moreo5er( prior wor8s were done on 2ommer2ial *an8s and wit/
ot/er standards /en2e 2omes t/e s2ope of s2rutini<ing 2omplian2e of I>7S-B *- t/e spe2iali<ed *an8s of
Banglades/. .gain( sin2e people /a5e more relian2e on t/e spe2iali<ed *an8s( so it /as deep importan2e to find
out t/e 2omplian2e status of t/ese *an8s.

*$ O+ecti)es of the study
1. ;o find out t/e degree of 2omplian2e of t/e standard *- t/e *an8s L
2. ;o find out t/e de5iation from t/e standard.

,$ -ethodology of the study
;o draw t/e 2on2lusion on t/e topi2 onl- t/e se2ondar- sour2e of information /as *een anal-<ed. ;/is in2ludes
two -ears annual reports( arti2les on t/is issue( different rele5ant a2ts et2. ;/e anal-sis is done *- 2ontent
anal-sis( w/i2/ is widel- *eing used in a so2ial s2ien2e resear2/( w/i2/ in5ol5es reading t/e annual report and
po28ing up *ot/ ?ualitati5e and ?uantitati5e information. So t/is te2/ni?ue /as *een used for t/is empiri2al stud-.
Ne=t to( find out t/e a5erage per2entage of 2omplian2e weig/t was gi5en as( for 2omplian2e of ea2/ re?uirement
1( for partial 2omplian2e 0.5 and for non2omplian2e 0.

.$ Scope of the study
;/e anal-sis of t/e stud- /as *een done on sample *asis on t/e annual reports of t/e si= state owned
spe2iali<ed *an8s.
;/e stud- is limited to w/et/er t/e notes to t/e finan2ial statements /a5e *een prepared a22ording to t/e
I>7S B International >inan2ial 7eporting Standard B" or not.
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

)#
;/e entities w/ose finan2ial statements are *eing anal-<ed are state owned. ;/erefore( t/ere is a ris8 of
non-2omplian2e of some material re?uirement.
3ue to lo2al regulator- pres2ription( 2omplian2e of standard is affe2ted.

/$ 0ite!atu!e Re)iew
Spe2iali<ed Ban8s are *an8ing in t/e area( w/i2/ needs to *e updated in t/e *an8ing world and it is an integral
part of 2urrent and future finan2ial mar8et. .lmost e5er- 2ountr- in t/e world( Eo5t. forms spe2iali<ed *an8s for
spe2ial purpose. .s t/e /istor- of t/is t-pe of *an8 in t/e legal format is not mu2/ long( resear2/ stud- on t/e
finan2ial reporting dis2losures *- t/e spe2iali<ed *an8ing is not so ri2/. +ossain Md. S. and Baser M.. 2011
pp- 1)" des2ri*ed t/e 2omplian2e of I.S $0 of t/e Spe2iali<ed Ban8s dis2losure. In t/at arti2le t/e- stated a*out
four spe2iali<ed Ban8s in2luding Erameen Ban8. Eenerall-( EB is not spe2iali<ed *an8 in t/e e-e of Banglades/
Ban8 as well as >inan2e Ministr-. %n t/e 2ontrar-( t/e- /a5e s/own 2omplian2e wit/ I.S $0 in four *an8s. .s
now a da-( t/ere is no o*ligation for 2omplian2e of I.S $0L t/ere is o*ligation of I>7S B 2omplian2e formulated
*- I.SB. ;/is stud- will s/ow t/e degree of 2omplian2e in si= Spe2iali<ed Ban8s.

1$ 2heo!etical ackg!ound
1$#$ State owned Specialized Banking
E5er- Eo5ernment wants to de5elop its e2onom-. ;/erefore( t/e- emp/asis on some se2tors more. ;/ere is a
need for finan2ing. 7egarding t/at spe2iali<ed *an8s 2on2ept was 2reated in t/e world. +ossain Md. S. and Baser
M.. 2011 pp- 1)" state t/at spe2iali<ed *an8s are foreign e=2/ange *an8s( industrial *an8s( de5elopment *an8s(
e=port-import *an8s( 2atering to spe2ifi2 needs of t/ese uni?ue a2ti5ities. ;/ese *an8s pro5ide finan2ial aid to
industries( /ea5- turn8e- proKe2ts and foreign trade. ;/ese 2onsist of ot/er de5elopment *an8s of t/e Banglades/
and some NE%s t/at e=tend mi2ro 2redit to t/e people. Some *an8s are 2ompletel- go5ernment-owned
institutions esta*lis/ed mainl- to pro5ide medium and long-term 2redits to t/e industrial( agri2ultural( and real
estate se2tors of t/e e2onom- and to promote t/e esta*lis/ment of pri5ate de5elopment *an8s in t/e 2ountr-. ;/e
fo2us of t/ese spe2iali<ed institutions is to promote and a22elerate t/e so2io-e2onomi2 de5elopment of t/e
2ountr- *- performing *an8ing( finan2ing and in5estment operations and to esta*lis/ and parti2ipate in
agri2ultural( 2ommer2ial and industrial 5entures *ased on t/e Islami2 2on2ept of *an8ing.
1$*$ State owned Specialized Banks in Bangladesh:
In Banglades/ t/ere are si= states owned Spe2iali<ed Ban8s as per Ministr- of >inan2e. .s per Banglades/ *an8
online-spe2iali<ed Ban8 are four in num*er. +ossain Md. S/amim and Baser M.. 2011 !!-1$" stated t/at
Erameen Ban8( Somo*a- Ban8( ;/e 3/a8a Mer2antile Co-operati5e Ban8 1imited 3MCB1" are spe2iali<ed
*an8s. Ne5ert/eless( it is not true as per Banglades/ Ban8 and >inan2e Ministr- Ban8 3i5ision. Ministr- of
>inan2e information is more appropriate in t/e fun2tional 5iew of spe2iali<ed Ban8s. B3B1 is mi=ed formation
of BSB and BS7S( w/i2/ is spe2iali<ed in industriali<ation( B,B and 7,4B( are 2losel- spe2iali<ed for
de5elopment of Banglades/ .gri2ulture. B.SIC Ban8 is related to Small Industries de5elopment. .nsar &3!
Ban8 is engaged for de5elopment of poor 2ommunit-( .nsar of Banglades/. Moreo5er( ,armasanst/an Ban8 is
engaged for t/e de5elopment of -oung unemplo-ed. ;/erefore( si= *an8s /a5e *een ta8en for anal-sis. +ere is
t/e list of State owned Spe2iali<ed Ban8 of Banglades/
S$3 3ame of the Bank
1 Banglades/ 3e5elopment Ban8 1imited B3B1"
2 Banglades/ ,ris/i Ban8 B,B"
$ B.SIC Ban8 1imited
) 7aKs/a/i ,ris/i 4nna-an Ban8
5 .nsar &3! 4nna-an Ban8
' ,armasangst/an Ban8
4Sou!ce: Ban8 and >inan2ial Institutions 3i5ision( Ministr- of >inan2e Eo5ernment of t/e !eopleHs 7epu*li2 of
Banglades/5
1$ ,$ Focal point of IFRS 7 %Financial Inst!uments: 'isclosu!es&
'.$.1. Classes of >inan2ial Instrument9 3is2lose t/e t-pes of finan2ial Instruments 2ontained in t/e Balan2e S/eet
MI>7S B.'N
'.$.2. 3is2losure of Balan2e s/eet Signifi2an2e: 3is2lose t/e signifi2an2e of finan2ial instruments for an entit-Hs
finan2ial position and performan2e. MI>7S B.BN
'.$.$. Balan2e s/eet dis2losure9 ;/is in2ludes dis2losures for ea2/ of t/e following 2ategories9 MI>7S B.#N
i" >inan2ial assets measured at fair 5alue L
ii" +eld-to-maturit- in5estments L
iii" 1oans and re2ei5a*les L
i5" .ssets a5aila*le-for-saleL
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

)9
5" >inan2ial lia*ilities at fair 5alue
5i" >inan2ial lia*ilities measured at amorti<ed 2ost
'.$.). Collateral MI>7S B.1)-I>7S B.15N9 3is2lose an- pledged .sset for 1ia*ilit-.
'.$.5. In2ome Statement and E?uit-: Items of in2ome( e=pense( gains( and losses( wit/ separate dis2losure of
gains and losses MI>7S B.20a"N
'.$.'. .22ounting poli2ies for finan2ial instruments MI>7S B.21N
'.$.B Information a*out /edge a22ounting MI>7S B.22N
o des2ription of ea2/ /edge( /edging instrument( and fair 5alues of t/ose instruments( and nature of
ris8s *eing /edged
o for 2as/ flow /edges( t/e periods in w/i2/ t/e 2as/ flows are e=pe2ted to o22ur( w/en t/e- are
e=pe2ted to enter into t/e determination of profit or loss( and a des2ription of an- fore2ast
transa2tion for w/i2/ /edge a22ounting /ad pre5iousl- *een used *ut w/i2/ is no longer e=pe2ted
to o22ur
o if a gain or loss on a /edging instrument in a 2as/ flow /edge /as *een re2ognised in ot/er
2ompre/ensi5e in2ome( an entit- s/ould dis2lose t/e following9 MI.S B.2$N
o t/e amount t/at was so re2ogni<ed in ot/er 2ompre/ensi5e in2ome during t/e period
o t/e amount t/at was remo5ed from e?uit- and in2luded in profit or loss for t/e period
o t/e amount t/at was remo5ed from e?uit- during t/e period and in2luded in t/e initial measurement
of t/e a2?uisition 2ost or ot/er 2arr-ing amount of a non-finan2ial asset or non- finan2ial lia*ilit- in
a /edged /ig/l- pro*a*le fore2ast transa2tion
o for fair 5alue /edges( information a*out t/e fair 5alue 2/anges of t/e /edging instrument and t/e
/edged item MI>7S B.2)a"N
o /edge ineffe2ti5eness re2ogni<ed in profit and loss separatel- for 2as/ flow /edges and /edges of
a net in5estment in a foreign operation" MI>7S B.2)*-2"N
o information a*out t/e fair 5alues of ea2/ 2lass of finan2ial asset and finan2ial lia*ilit-( along wit/9
MI>7S B.25-$0N
'.$.#. Iualitati5e 3is2losures of 7is8 MI>7S B.$$N9 ;/e ?ualitati5e dis2losures des2ri*e9
o 7is8 e=posures for ea2/ t-pe of finan2ial instrument
o ManagementHs o*Ke2ti5es( poli2ies( and pro2esses for managing t/ose ris8s
o C/anges from t/e prior period
'.$.9. Iuantitati5e 3is2losures of 7is8: ;/e ?uantitati5e dis2losures pro5ide information a*out t/e e=tent to
w/i2/ t/e entit- is e=posed to ris8( *ased on information pro5ided internall- to t/e entit-Hs 8e- management
personnel. ;/ese dis2losures in2lude9 MI>7S B.$)N
o Credit 7is8
o 1i?uidit- 7is8
o Mar8et 7is8 MI>7S B.)0-)2N
'.$.10. ;ransfers of >inan2ial .ssets MI>7S B.)2 .-+N9 .n entit- s/all dis2lose information t/at ena*les users of
its finan2ial statement9
i" ;o understand t/e relations/ip *etween transferred finan2ial assets t/at are not dere2ogni<ed in t/eir entiret-
and t/e asso2iated lia*ilitiesL and
ii" ;o e5aluate t/e nature of( and ris8s asso2iated wit/( t/e entit-Hs 2ontinuing in5ol5ement in dere2ogni<ed
finan2ial assets. MI>7S B )2BN Sour2e9 www.ifrs.org"

7$ Analysis 6 Findings
7$#$ Compliance of IFRS y the institutions
;/e *usiness entities design t/eir a22ounting s-stem as per t/e re?uirements of t/e In2ome ;a= 1aw. .*o5e all
in order to pro5ide a standardi<ed report all t-pes of *an8s tr- to follow t/e I>7S B B>7S B" w/i2/ is t/e
re?uirement of t/e modern 2ompetiti5e *usiness world. .n in5estigation is 2ondu2ted to o*ser5e t/e 2omplian2e
status of t/e spe2iali<ed *an8s of Banglades/ w/et/er t/e- follow t/is underl-ing standard regarding t/e
preparation of t/eir finan2ial statements. ;/e result 2an *e deri5ed as follows9
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

50
2ale7*: Schedule of compliance status:
S$3 Re8ui!ement9
'isclosu!es
B'B0 B"B BASIC R":B A3SAR
;'(
"AR-ASA3<S2=A3
1 Classes of >inan2ial
Instrument M!ara ' N
O O O O O O
2 Balan2e S/eet !resentation
M!ara BN
O O O O O O
$ Balan2e S/eet 3is2losures
M>air 5alue of .ssets and
1ia*ilities and 1oansN
M!ara #N
!artial !artial !artial !artial !artial !artial
) Collateral M!ara 1)-15N P P O P P P
5 In2ome Statement Q E?uit-
In2ome( E=pense Eains
1osses" M!ara 20N

O

O

O

O

O

O
' .22ounting !oli2ies M!ara
21N
O O O O
O O
B 3is2losure a*out +edge
M!ara21-$0N
P P P P
P Pl
# Iualitati5e 7is8 3is2losure
M!ara $$N
O !artial O P
P P
9. Iuantitati5e 7is8
3is2losure M!ara $)-)2N
O !artial O P
P P
10. ;/e Nature of t/e
;ransferred .ssets M!ara )2
3N

P

P

P

P

P

P
2he empi!ical findings of the study f!om tale#a!e shown elow>
No. of 2ompanies '
No. of re?uirements as per I>7S-B 10
Ma=imum num*er of re?uirement 2omplied *- t/e 2ompan- #
Minimum num*er of re?uirement 2omplied *- t/e 2ompan- )
.5erage num*er of 2omplian2e *- t/e 2ompanies '

2ale7,: Summa!y of compliance y Indi)idual Comme!cial ank:
Complying Banks 2otal
compliance
!e8ui!ement
3o$ of
!e8ui!ement
fulfilled
%?& compliances
fulfilled
'e)iation f!om the
indust!y a)e!age %?&
B3B1 10 '.5 '5D 10D"
B,B 10 5.5 55D 0
B.SIC 10 B.5 B5D 20D"
7,4B 10 ).5 )5D 10D
.NS.7
&3!
10 ).5 )5D 10D
,.7M.S.NES;+.N 10 ).5 )5D 10D
D" of 2omplian2e R 7e?uirement 2omplied6 ;otal re?uirement.
;/e anal-sis s/ows t/at of t/e si= *an8s and of t/e total 10 re?uirements( onl- one *an8 B.SIC *an8 2omplied
wit/ B re?uirements full- and one re?uirement partiall- ( total is B.5 re?uirements B5D"( and( B3B1 2omplied
' re?uirements full- and one is partiall-( total '.5 '5D". B,B 2omplied ) re?uirements full- and $
re?uirements partiall-( total is 5.5 55D" and ot/er t/ree *an8s li8e 7,4B( .NS.7 B.N, and
,.7M.S.NES;+.N Ban8 2omplied ) re?uirements full- and one re?uirement partiall-( t/en total ).5 )5D"
re?uirements .
.not/er important finding is t/at some re?uirements were 2ompletel- ignored w/ere some were partiall-
followed and ot/ers were full- 2omplied. Besides( four re?uirements were full- 2omplied wit/ *- all t/e si=
*an8s( 2 re?uirements are 5er- not 2omplied *- an- of t/em and four are partiall- 2omplied.
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

51
2ale7.: A)e!age no$ of compliance:
Status of compliance 3o$ of !e8ui!ement @eight @eighted sco!e
>ull- 2omplied ) 1 )
!artiall- 2omplied ) 0.5 2
Not 2omplied 2 0 0
2otal '
>or full 2omplian2e weig/t R 1
>or non-2omplian2e weig/t R 0
>or partiall- 2omplied weig/t R 0.5
Jeig/ted s2oreR '610 R '0D
It is also wort/ mentioning t/at t/e a5erage 2omplian2e of t/e standard *- t/e 2ompanies is 55D. %f t/e si=
*an8s( B.SIC and B3B1 /a5e /ig/er positi5e de5iation and ot/er t/ree *an8s /a5e large negati5e de5iation.
.5erage de5iation from t/e industr- is almost same for all t/e *an8s 5D".
2ale7/: %?& compliance of the indi)idual !e8ui!ement:
S$3 Re8ui!ement9 'isclosu!es 3o$ of complied companies %?& of compliance
1 Classes of >inan2ial Instrument M!ara ' N ' 100D
2 Balan2e S/eet Signifi2an2e M!ara BN ' 100D
$ Balan2e S/eet 3is2losures
M!ara #-19N
' partialR$ 50D
). Collateral M!ara 1)-15N 1 1'.'BD
5 In2ome Statement Q E?uit- In2ome( E=pense
Eains 1osses" M!ara 20N
' 100D
' .22ounting poli2es M!ara 21N ' 100D
B. 3is2losure of +edge .22ounting
M!ara 22-$0N
0 ---
#. Iualitati5e 3is2losure
M!ara $$N
2 full and one partial
R2.5
)1.1BD
9. Iuantitati5e 3is2losure
M!ara $)-)2N
2 full and one partial
R2.5
)1.1BD
10. ;/e nature of t/e transferred assets M!ara )2 3N 0 --
;otal 550
.5erage 55D


>igure9 Complian2e of I>7S B re?uirements *- all spe2iali<ed Ban8s in Banglades/
.part from a*o5e numeri2al anal-sis t/e detailed 5ersion of 2omplian2e findings are des2ri*ed as follows9
#$ Classes of Financial Inst!ument
.ll t/e si= *an8s full- 2ompl- wit/ t/is re?uirement *- s/owing 2lasses of finan2ial instrument. ;/erefore(
2omplian2e status for t/is re?uirement is 100D
*$ Balance sheet Significant 'isclosu!e
.ll t/e si= *an8s full- 2ompl- wit/ t/is re?uirement *- s/owing 2lasses of .ssets( 1ia*ilities and E?uit- in
Balan2e s/eet. ;/e 2omplian2e status for t/is re?uirement is 100D
,$ Balance sheet 'isclosu!e
.ll si= Ban8s present dis2losures partiall- s/owing loans( ad5an2es( and ot/ers asset dis2losures. +owe5er( t/ese
*an8s are failed to assess fair 5alue of .ssets and lia*ilities as t/ere is a rule B!73 of Banglades/ Ban8s.
;/erefore( t/e 2omplian2e is 50D.
.$ Collate!al
%nl- B.SIC Ban8 2omplied t/is re?uirement. ;/e- s/owed t/e Collateral in t/e dis2losure. %t/er *an8 did not
do t/at. ;/e 2omplian2e is 1'.'BD
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

52
/$ Income Statement 6 A8uity %IncomeB ACpense <ains 0osses&
.ll t/e *an8s s/ow t/is Kust after t/e *alan2e s/eet. It /as *een presented 2lassif-ing In2ome e=penses Eains
and 1osses. ;/is re?uirement is 2omplied *- 100D.
1$ Accounting (olicies 4(a!a *#5
.ll t/e *an8s s/ow .22ounting poli2ies su2/ as 5aluation of .ssets and t/eir own depre2iation poli2-. .part
from t/is( t/e impairment of .ssets /as *een also s/own in t/e 7eports. It is 2omplied *- 100D.
7$ 'isclosu!es of =edge Accounting
No one did dis2lose a*out +edging. ;/erefore( 2omplian2e is 0.
D$ Eualitati)e 'isclosu!e 4(a!a ,,5
%nl- B3B1 and B.SIC dis2lose t/e ?ualitati5e dis2losures of 7is8. %t/er *an8 did not do t/at. ;/erefore( t/e
2omplian2e is )1.'BD
F$ Euantitati)e 'isclosu!e 4(a!a ,.7.*5 4C!edit RiskB 0i8uidity RiskB -a!ket Risk5
%nl- B3B1 and B.SIC dis2lose t/e ?uantitati5e dis2losures of 7is8. %t/er *an8 did not do t/at. ;/erefore( t/e
2omplian2e is )1.'BD
#G$ 2he natu!e of the t!ansfe!!ed assets 4(a!a .* '5
Not/ing is mentioned in t/e long annual reports of si= spe2iali<ed *an8s as to t/e nature of t/e transferred assets.
;/erefore( t/e 2omplian2e is 0.
7$*$ Affect of Compliance
;/e o*Ke2ti5e of I>7S B is to pres2ri*e appropriate presentation and dis2losure standards for dis2losures of
finan2ial instrument of an entit- espe2iall- for *an8s( w/i2/ supplement t/e re?uirement of ot/er standards. ;/e
intention is to pro5ide users wit/ appropriate information to assist t/em in e5aluating t/e finan2ial position and
performan2e of *an8s and to ena*le t/em to o*tain a *etter understanding of t/e spe2ial 2/ara2teristi2s of t/e
operations of *an8s. ;/e 2omplian2e wit/ t/e standard will fa2e t/e following s2enario9
%*5iousl-( t/e maKor o*Ke2ti5e of an- I>7S is to pro5ide true and fair 5iew of t/e entit- to t/e
sta8e/olders. Conse?uentl-( t/e 2omplian2e of I>7S will en/an2e t/e 2redi*ilit- of t/e information
pro5ided.
;/e 2omplian2e will also important for t/e 2omplian2e of re?uirements *- t/e regulator- wat2/dogs
;/e legal framewor8 of t/e state also re?uires t/e full 2omplian2e of I>7S.
;/e t/ird pillar of B.SE1-2 deals wit/ mar8et dis2ipline t/roug/ effe2ti5e dis2losure to en2ourage safe
and sound *an8ing pra2ti2es. ;/is dis2losure pillar is 2losel- related wit/ t/e International >inan2ial
7eporting Standard I>7S"
;/is 2omplian2e will *e /elpful for 2redit rating purpose and 2an 2olle2t in5estment from outsider.
;/e 2omplian2e will ma8e t/e management more a22ounta*le and t/us go a long a wa- to fulfill t/e
intended o*Ke2ti5es of spe2iali<ation.
;/ese *an8s 2an meet up t/eir fund pro*lem *- issuing s/ares in t/e 2apital mar8et( *ut *efore t/at
2omplian2e wit/ re?uired standard is must.
;/ese 2omplian2es will 2on5in2e t/e pu*li2 a*out t/e transparen2- of spe2iali<ed *an8.
7$,$ Affect of 3on7compliance
I>7S are t/e guidelines to present a true and fair 5iew of t/e finan2ial performan2e and finan2ial position of an
entit- to its users. %*5iousl- if not 2omplied wit/ t/e standards it poses to some negati5e results. So it is 5er-
2lear t/at t/e non2omplian2e will a2t as a /indran2e in fulfilling t/e 2ore o*Ke2ti5e of finan2ial reporting. ;/e
non-2omplian2e will fet2/ t/e following pro*lem.
Non2omplian2e will en/an2e t/e s2ope of 2orruption *- t/e management.
It will not *e Kustifia*le to *e list in t/e 2apital mar8et wit/out perfe2tl- 2ompl-ing t/e a22ounting
standard.
Simpl- spea8ing non2omplian2e of I>7S is t/e 5iolation of laws as a22ording to t/e Companies .2t
199) and is su*Ke2t to punis/ment a22ording to se2tionA 211-21# of t/e said a2t.
!rin2ipall- it redu2es t/e degree and s2ope of usefulness of finan2ial information.
Consolidation wit/ ot/er entit- *e2omes diffi2ult due to improper 5aluation.
Earnings management /appens 2ontinuousl- and it /as se5ere impa2t on our resour2e mo*ili<ation.
Corporate go5ernan2e re?uires 2omplian2e wit/ all rules and regulation to up/old t/e interest of t/e
sta8e/olders. ;/is is also a part of t/e 2orporate so2ial responsi*ilit-. So t/is 2an@t *e maintained
wit/out full 2omplian2e of t/e re?uired standard.

D$ Recommendations
.fter a 2areful s2rutin- of t/e annual reports of si= spe2iali<ed *an8s( it /as *een found t/at t/e 2ompanies are
presenting t/eir information on t/e finan2ial statements in line wit/ t/e I>7S-B. .lt/oug/ t/e degree of
2omplian2e of t/e *an8s is /ig/( following re2ommendation s/ould 2onsider *- all t/e parties 2on2ernedL
;o /a5e a fair pi2ture of t/e organi<ation as t/e spe2iali<ed *an8s pla- a signifi2ant role in t/e
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 !aper" ISSN 2222-2#$9 %nline"
&ol.'( No.21( 201)

5$
de5elopment of our 2ountr-( t/e- s/ould 2ompl- wit/ all t/e re?uirements guided *- t/e nationall- and
internationall- re2ogni<ed standards.
;/e a22ounting personnel of t/e 2on2erned entities s/ould *e trained as to t/e update of t/e new
a22ounting pronoun2ement identif-ing t/e non 2omplian2es.
;/ese *an8s s/ould ma8e a5aila*le .nnual reports in t/e mar8et so t/at users and sta8e/olders 2an
8now t/e information.
;/e- 2an 2ome to t/e mar8et *- t/e proper formalities maintained *- >inan2e ministr- and Banglades/
Ban8 and SEC.
.s t/ese spe2iali<ed *an8s are t/e large part of *an8ing in t/e 2ountr- and large 2ontri*utor-( t/e
spe2ial super5ising and in2enti5es under Ban8 3i5ision of >inan2e Ministr- s/ould *e set up for
flouris/ing foreign aid and *an8s in our 2ountr-

F$ Conclusion
!resentation of finan2ial reporting 2ompl-ing I>7S is of immense importan2e to t/e users of t/ose *e2ause it
en/an2es t/e degree and s2ope of usefulness of a22ounting information. It is now *e2oming in2reasingl- e5ident
t/at e=isten2e of properl- fun2tioning *an8ing s-stem fa2ilitates t/e de5elopment pro2ess in man- important
wa-s. !roper a22ounting and reporting 2ontri*ute positi5el- on proper fun2tioning of *an8s. ;/at is w/- t/e
International >inan2ial 7eporting Standards B I>7S B" is de5eloped to gi5e standardi<ed reporting aspe2ts for
*an8ing se2tor. It is e5ident from t/e a*o5e anal-sis t/at spe2iali<ed *an8s are good at 2ompl-ing wit/ t/e
re?uired 2omplian2e *- t/e standard pres2ri*ed for t/em. It is /oped t/at due to t/e glo*ali<ation( multinational
spe2iali<ed *an8ing 2an easil- 2apture t/e essen2e of t/e international re?uirements( w/i2/ ma8e t/em
2ompetiti5e in pro5iding t/e ser5i2es. Based on t/e anal-sis( it /as *een found t/at t/ere is no signifi2ant
differen2e in terms of 2omplian2e of I>7S B( among t/e si= spe2iali<ed *an8s in Banglades/. ;/at means all of
t/e *an8s tr- to follow similar items needed to 2ompl- wit/ t/e international standard in order to pro5ide
a22ounta*ilit- and transparen2- in finan2ial reporting( w/i2/ ensure ma=imum dis2losure of t/e rele5ant( relia*le
and useful information to t/e interested user groups. In fine( it 2an *e 2ulminated t/at preparations of finan2ial
reports of t/e Spe2iali<ed Ban8@s /a5e *een presented in line wit/ t/e I>7S-B 2ompletel-.

Refe!ences
Ju22a( 1isaL Emilio !arodiL Ea5in JonesL Sop/ie Sassard Mar2/ 9( 201$". FSpe2ial 7eport9 3ownfall of t/e
worldHs oldest *an8F.
./med M. uddin( S.,. Bala and .. C/owd/ur- 200)" S>inan2ial reporting in 2omplian2e wit/ I.S9 . stud- in
Banglades/T ;/e Kournal of Business studies(&ol. UU&( No.2.
+ossain M.S/. and Baser .... SComplian2e of I>7S A B9 . Case Stud- on t/e Spe2iali<ed Ban8s of
Banglades/T 7esear2/ Journal of >inan2e and .22ounting &ol. 2 No. )( 2011 !! 1$-21.
+ossain. M. Mo/a**at 2010" S. 7e5iew of Corporate >inan2ial 7eporting 7egulations in Banglades/T( B4B;
Journal( &ol. $( pp. 1B5-1#B.
+ossain. M. Mo/a**at 2012" SImpa2t of B>7S B in t/e >inan2ial Statements of Ban8s9 . Case from
Banglades/T( t/e Cost and Management( &ol. U1( No. 2( pp. 1$-1B.
+ossain. M. Mo/a**at 2012" SInternational >inan2ial 7eporting Standard I>7S" B9 Issues and C/allenges for
Ban8sT( !aper !resented in 7esear2/ Jor8s/op( No5em*er 11( BIBM( 3/a8a.
+ossain. M. Mo/a**at 2012" SInternational >inan2ial 7eporting Standard B and >inan2ial Statements of
Ban8sT( BIBM Bulletin( . Iuarterl- !u*li2ation of BIBM( &ol. 15( No. 1 Q 2( pp $-10.
+a?ue ;. and Islam M.. 2005"( Complian2e of I.S $0 *- Ban8 Companies of Banglades/T ;/e 2ost and
Management
.nnual report from 2011 to 2012 of Banglades/ 3e5elopment *an8 1imited( M%nlineN a5aila*le9
/ttp966www.*d*l.2om.*d
.nnual report from 2011 to 2012 of Banglades/ ,ris/i *an8 MonlineN a5aila*le9 /ttp966www.8ris/i*an8.org.*d
.nnual report from 2011 to 2012 of Basi2 Ban8 1imited MonlineN a5aila*le9 /ttp966www.*asi2*an8limited.2om6
.nnual report from 2011 to 2012 of 7aKs/a/i ,ris/i 4nna-an Ban8 MonlineN a5aila*le9 /ttp966www.r8u*.org.*d
.nnual report from 2011 to 2012 of .nsar &dp 4nna-an Ban8 MonlineN a5aila*le9 www. ansar5dp*an8.2om.*d
.nnual report from 2011 to 2012 of ,armasangt/ann Ban8 MonlineN a5aila*le
/ttp966www.8armasangst/an*an8.go5.*d6
E%B Eo5ernment of Banglades/"( ;/e Ban8 2ompanies .2t 1991.
E%B( ;/e 2ompanies .2t 199).
www. ifrs.org.
www.**.go5.org6
/ttp966www.mof.go5.*d
The IISTE is a pioneer in the Open-Access hosting service and academic event
management. The aim of the firm is Accelerating Global Knowledge Sharing.

More information about the firm can be found on the homepage:
http://www.iiste.org

CALL FOR JOURNAL PAPERS
There are more than 30 peer-reviewed academic journals hosted under the hosting
platform.
Prospective authors of journals can find the submission instruction on the
following page: http://www.iiste.org/journals/ All the journals articles are available
online to the readers all over the world without financial, legal, or technical barriers
other than those inseparable from gaining access to the internet itself. Paper version
of the journals is also available upon request of readers and authors.

MORE RESOURCES
Book publication information: http://www.iiste.org/book/

IISTE Knowledge Sharing Partners
EBSCO, Index Copernicus, Ulrich's Periodicals Directory, JournalTOCS, PKP Open
Archives Harvester, Bielefeld Academic Search Engine, Elektronische
Zeitschriftenbibliothek EZB, Open J-Gate, OCLC WorldCat, Universe Digtial
Library , NewJour, Google Scholar


Business, Economics, Finance and Management Journals PAPER SUBMISSION EMAIL
European Journal of Business and Management EJBM@iiste.org
Research Journal of Finance and Accounting RJFA@iiste.org
Journal of Economics and Sustainable Development JESD@iiste.org
Information and Knowledge Management IKM@iiste.org
Journal of Developing Country Studies DCS@iiste.org
Industrial Engineering Letters IEL@iiste.org
Physical Sciences, Mathematics and Chemistry Journals PAPER SUBMISSION EMAIL
Journal of Natural Sciences Research JNSR@iiste.org
Journal of Chemistry and Materials Research CMR@iiste.org
Journal of Mathematical Theory and Modeling MTM@iiste.org
Advances in Physics Theories and Applications APTA@iiste.org
Chemical and Process Engineering Research CPER@iiste.org
Engineering, Technology and Systems Journals PAPER SUBMISSION EMAIL
Computer Engineering and Intelligent Systems CEIS@iiste.org
Innovative Systems Design and Engineering ISDE@iiste.org
Journal of Energy Technologies and Policy JETP@iiste.org
Information and Knowledge Management IKM@iiste.org
Journal of Control Theory and Informatics CTI@iiste.org
Journal of Information Engineering and Applications JIEA@iiste.org
Industrial Engineering Letters IEL@iiste.org
Journal of Network and Complex Systems NCS@iiste.org
Environment, Civil, Materials Sciences Journals PAPER SUBMISSION EMAIL
Journal of Environment and Earth Science JEES@iiste.org
Journal of Civil and Environmental Research CER@iiste.org
Journal of Natural Sciences Research JNSR@iiste.org
Life Science, Food and Medical Sciences PAPER SUBMISSION EMAIL
Advances in Life Science and Technology ALST@iiste.org
Journal of Natural Sciences Research JNSR@iiste.org
Journal of Biology, Agriculture and Healthcare JBAH@iiste.org
Journal of Food Science and Quality Management FSQM@iiste.org
Journal of Chemistry and Materials Research CMR@iiste.org
Education, and other Social Sciences PAPER SUBMISSION EMAIL
Journal of Education and Practice JEP@iiste.org
Journal of Law, Policy and Globalization JLPG@iiste.org
Journal of New Media and Mass Communication NMMC@iiste.org
Journal of Energy Technologies and Policy JETP@iiste.org
Historical Research Letter HRL@iiste.org
Public Policy and Administration Research PPAR@iiste.org
International Affairs and Global Strategy IAGS@iiste.org
Research on Humanities and Social Sciences RHSS@iiste.org
Journal of Developing Country Studies DCS@iiste.org
Journal of Arts and Design Studies ADS@iiste.org