IFRS

Octo Radian Putra(125020305111005)

Tyas Ardy Rahayu (125020307111008)
Fisabela Apriliasari (125020307111022)

IFRS?

International Convergence of
Financial Reporting

Reduce diversity and harmonize

accounting standards and
practices internationally

Convergence as the Buzz Word in

International Financial Reporting

Harmonization : Some people see it

as the same as standardization.
De jure harmonization & De facto
harmonization
Convergence : adoption of one set of
standards internationally.
Reducing international differences in
accounting standards by developing
high-quality standards in partnership
with national standard-setters.

Major Harmonization
Efforts

IOSCO
IFAC
EU
IASC

Creation of the IASB

Took over from IASC as the
creator of international
accounting standards, which
were to be called IFRS on April ,
2001.
Process restructuring the IASC to
IASB took over 5 years
Formation of the IASB in 2001,
marked the beginning of a new
era in international financial

The IASB Framework

To establish the concepts underlying the
preparation and presentation of IFRS-based
financial statement
1.Objective of financial statements and
underlying assumptions
2.Qualitative characteristic that affect the
usefulness of financial statements
3.Definition, recognition, and measurement
o.t financial statements elements
4.Concepts of capital and capital maintenance

International Financial
Reporting Standards
First IFRS was issued by IASB in 2003,
providing guidance on the important
question of how a company goes
about restating its financial statement
when adopts IFRS for the first time.
IASB doesnt have ability to enforce
its standards. Instead, IASB develops
IFRS for the public good, making them
available to any country/company that
might choose to adopt them.

Arguments for
Convergence
Comparability of financial statement
worldwide is necessary for the
globalization of capital markets
Simplify the evaluation by
multinational company of possible
foreign take over targets
Reduce financial reporting cost
Raise the quality level of accounting
practices internationally

Argument against
Convergence
Nationalism
Because different environmental
influences, different in
accounting across countries
might be appropriate and
necessary (dilemma of global
harmonization)

International Convergence
toward IFRS
Three different convergence
strategies
1.Replacing national GAAP with
IFRS
2.Adopting IFRS as national
GAAP on a standard-bystandard basis
3.Eliminating differences
between national GAAP and
IFRS when possible &

Major concerns when achieving IFRS

convergence:
Complicated nature of particular standards
Using IFRS as the basis for taxation is seen
as a problem
Disagreement with certain significant IFRS
Insufficient guidance on first-time
application of IFRS
Limited capital markets, little benefit to be
derived from using IFRS
Satisfaction among investors/users
IFRS language translation difficulties

The Adoption of IFRS

All companies; IFRS replace national GAAP
Parent companies in preparing consolidated
financial statements; national GAAP is used in
parent company-only financial statements
Stock exchange listed companies in preparing
consolidated financial statements.
Foreign companies listing on domestic stock
exchanges
Domestic companies that list on foreign stock
exchanges

IFRS in the EU
IFRS for listed companies only.
Difficulty : lack of organized and
liquid markets for many assets and
obligations

IFRS in the U.S

Joint projects
Short-term convergence project
Liaison IASB member
Monitoring of IASB projects
The convergence research project
Consideration of convergence
potential in board agenda decisions

IFRS vs GAAP
1. Definition
2. Recognized
3. Measurement
4. Alternatives
5. Lack of requirement or guidance
6. Presentation
7. Disclosure

Measurements and Recognation

Standarts
1. Inventory
2. Plant and equipment
3. Investment property
4. Impairment of asset
5. Intangible assets
6. Goodwill
7. Borrowing cost
8. Leases

Costs
Inventory costs
Non-inventory costs

INVENTORI
ES

Aspek-aspek dari aktiva tetap

1. Recognition of initial and
subsequent costs
2. Measurement at initial
recognition
3. Measurement after initial
4. Depreciation and Derecognition

Property, plant, and

equipment

Measurement after initial

Frequency of revaluation
Determination of fair value
Selection of assets to be
revalued
Accumulated depreciation

Aspects of Accounting for Fixed

Assets
1. Recognition of initial and
subsequent costs
2. Measurement at initial
recognition
3. Measurement after initial
4. Depreciation and Derecognition

Property, plant, and

equipment

 Measurement of impairment loss

Reversal of Impairment Losses

Impairment of
asset

 Operating lease
Finance Lease

Leases

IAS 37, Provisions, Contingent

Liabilities and Contingent Assets
IAS 37, Provisions, Contingent
Liabilities and Contingent Assets,
attempts to provide a consistent
framework and approach for
accounting for liabilities (and assets)
for which the timing, amount, or
existence is uncertain.
IAS 37 also contains specific rules
related to onerous contracts and
restructuring costs.

Contingent Liabilities and

Provisions
A provision is defined as a liability of
uncertain timing or amount. A
provision should be recognized when :
1. The entity has a present obligation as a
result of a past event;
2. It is probable (more likely than not) that
an outflow of resources embodying
economic events will be required to settle
the obligation.
3. A reliable estimate of the obligation can
be made.

 Contingent liabilities are defined as

1. Possible obligations that arise from past
events and whose existence will be
confirmed by the occurrence or
nonoccurrence of a future event, or
2. Apresent obligation that is not recognized
because (1) it is not probable that an outflow
of resources will be required to settle the
obligation or (2) the amount of the
obligation cannot be measured with
sufficient reliability.

Contingent Assets
A contingent asset is a probable
asset that arises from past
events and whose existence will
be confirmed only by the
occurrence or nonoccurrence of
a future event. Contingent
assets should not be recognized,
but should be disclosed when
the inflow of economic benefits
is probable.

Restructuring
A difference exists between IAS 37 and U.S. GAAP
with respect to when a provision should be recognized
related to a restructuring plan. IAS 37 indicates that
the provision should be recognized only when (1) a
detailed formal plan exists, and (2) the plans main
features have been announced to those affected by it
or implementation of the plan has begun.
U.S. GAAP does not allow recognition of a
restructuring provision until a liability has been
incurred. The existence of a restructuring plan and its
announcement does not necessarily create a liability.
Thus, the recognition of a restructuring provision may
occur at a later date under U.S. GAAP.

IAS 19, Employee

Benefits
IAS 19, Employee Benefits, is a
comprehensive standard covering the
following types of employee benefits:
1. Short-term employee benefits (such as
compensated absences and bonuses).
2. Postemployment benefits (pensions,
medical benefits, and other
postemployment benefits).
3. Other long-term employee benefits.
4. Termination benefits (such as severance
pay and early retirement benefits).

IFRS 2, Share-based
Payment
IFRS 2, Share-based Payment, sets out measurement
principles and specific requirements for three types of
share-based payment transactions:
1. Equity-settled share-based payment transactions, in which the
entity receives goods or services as consideration for equity
instruments of the entity (including stock options granted to
employees).
2. Cash-settled share-based payment transactions, in which the
entity acquires goods or services by incurring liabilities to the
supplier of those goods or services for amounts that are
based on the price (or value) of the entitys shares or other
equity instruments of the entity (e.g., share appreciation
rights).
3. Transactions in which the entity receives or acquires goods or
services and the terms of the arrangement provide either the
entity or the supplier of those goods or services with a choice
of whether the entity settles the transaction in cash or by
issuing equity instruments.

Stock Options Granted to

Employees
IFRS 2 requires the fair value method
to be used in accounting for stock
options granted to employees.
Under this method, total
compensation expense is computed
as the fair value of the options
expected to vest on the date the
options are granted.

IAS 12, Income Taxes

IAS 12, Income Taxes, and U.S. GAAP take a
similar approach to accounting for income
taxes. Both standards adopt an asset-andliability approach that recognizes deferred
tax assets and liabilities for temporary
differences and for operating loss and tax
credit carryforwards. However, differences
do exist. The accounting for income taxes
is a very complex topic, and only some of
the major differences are discussed here.

IAS 18, Revenue

IAS 18, Revenue, is a single standard that
covers most revenues, in particular
revenues from the sale of goods; the
rendering of services; and interest,
royalties, and dividends. There is no similar
single standard in U.S. GAAP. U.S. rules
related to revenue recognition are found in
various authoritative pronouncements;
making a direct comparison between IAS
18 and U.S. GAAP is difficult.

IAS 32 and IAS 39, Financial

Instruments
IAS 32, Financial Instruments:
Disclosure and Presentation, and IAS
39, Financial Instruments: Recognition
and Measurement, were developed on
the basis of U.S.GAAP. Both sets of
standards
Require financial assets and liabilities to be
measured and reported at fair value.
Allow the use of hedge accounting when
certain criteria are met. (Hedge accounting
is discussed in Chapter 6 of this book.)

Terimakasih

Pertanyaan 1:

Pertanyaan 2:
1.

Pertanyaan 3:
1.

Pertanyaan 4:

Sebutkan 7
perbedaan dari
IFRS dan GAAP?

Pertanyaan 5:

Apa yang
termasuk dari
biaya bukan
persediaan ?

Pertanyaan 6:

Apa aspekaspek dari

aktiva tetap?

Pertanyaan 7:
1.