أخر الاخبار

International Accounting Standards - IAS

What is meant by international accounting standards?

International Accounting Standards are defined as the standards used by accountants to record and present a company’s financial information. International Accounting Standards are the oldest international accounting standards issued by the International Accounting Standards Board (IASB), which is an independent standard-setting body located in London, and dates back to the International Accounting Standards Until 1973, when the International Accounting Standards Committee appeared, consisting of 16 accounting bodies from 9 different countries.

Accounting standards imposed how accounting transactions are recorded and how they are reported, as the goal was to reduce differences in the presentation of financial statements around the world, as these standards were updated from 1973 to 2001, as the number of international accounting standards reached 41 standard.

Accordingly, the accounting standards are a clarification of how and the ways in which financial transactions are recorded, the aim of which is to standardize how financial transactions are conducted around the world.

What is the purpose of international accounting standards? There are many goals for which international accounting standards were found, given the importance of international accounting standards in formulating accounting standards necessary for presenting financial statements and working to improve the regulatory procedures associated with them.
The importance of international accounting standards appears through the following objectives:
  • Establishing a global language concerned with preparing the accounting data for companies.
  • Grant the accounting data the necessary credibility and transparency.
  • Assisting companies to appropriately classify and report financial data.
  • Helping companies make important international comparisons and analyzes in an easy way.
  • Helping companies interpret financial statements according to accounting rules.
Based on the foregoing, the importance of financial accounting standards is reflected in the fact that they provide a common language for understanding financial statements between companies and different countries.
International Accounting Standards
International Accounting Standards

List of International Accounting Standards

How many international accounting standards are there?
Accounting standards consist of a set of accounting rules that explain how to report accounting transactions, as it serves as a common language for understanding financial statements between companies and different countries. International Accounting:

International Accounting Standard No. 1

International Accounting Standards No. 1 is known as Clarifying General Requirements for Presentation of Financial Statements. This standard is used to present a complete set of annual financial statements for comparison with the previous year. These financial statements consist of:
  • Statement of financial position.
  • Profit and loss statement.
  • Statement of changes in equity.
  • cash flow statement.

International Accounting Standard No. 2

International Accounting Standards No. 2 is known as Inventory, and is used to determine the cost of inventory and subsequent expenses, such as:
Purchase cost, transfer cost such as direct labor and indirect production expenses, transportation cost and other expenses.

International Accounting Standard No. 7

International Accounting Standard No. 7 is known as the statement of cash flows, and it is used to present the information in the statement of cash flows and the changes that occur in it. The cash flows include short-term, highly liquid and easily convertible investments.

International Accounting Standards No. 8

International Accounting Standards No. 8 defines accounting policies, changes in accounting estimates and errors, and this standard is responsible for the principles, bases and rules that companies use in preparing and presenting financial statements.

International Accounting Standards No. 10

International Accounting Standards No. 10 is known as the events after the reporting period, and this standard is used to indicate the time required for companies to adjust their financial statements after the reports that have been submitted, as this standard emphasizes disclosures.

International Accounting Standard No. 11

International Accounting Standard No. 11 is known as construction contracts, and it is the standard responsible for allocating contract revenues and costs during the accounting periods in which the construction contract is executed, such as: revenues and expenses during this period.

International Accounting Standard No. 12

International Accounting Standards No. 12 is known as Income Taxes, and it is concerned with the accounting treatment of income taxes, including domestic and foreign taxes, as they include all taxable profits.

International Accounting Standards No. 16

International Accounting Standard No. 16 is known as property, plant and equipment, it is responsible for recognizing property, plant and equipment as assets and for measuring the book value and depreciation value, since property, plant and equipment are tangible items that are measured according to their cost, which includes: purchase price, other costs associated with With them, the estimated costs are the cost of dismantling and removing them.

International Accounting Standards No. 17

International Accounting Standard No. 17 is known as leases, and this standard classifies lease contracts into two types, namely: a finance lease. Operating lease.

International Accounting Standards No. 18

International Accounting Standard No. 18 is known as Revenue, and this standard is used to clarify how revenue generated from the conduct of normal corporate activities, such as selling goods and providing services, is measured. Others' use of the assets of the enterprise that provides them with interest and dividends.

International Accounting Standard No. 19

International Accounting Standard No. 19 is known as employee benefits, which is concerned with what companies provide to employees in exchange for their services or to terminate their services, such as: employee benefits.

International Accounting Standards No. 20

International Accounting Standards No. 20 is known as Accounting for Government Grants and Disclosure of Government Assistance, where government grants are defined as transfers of resources by the government to an entity with the aim of complying with them under conditions related to the activities of operating entities, while government aid is defined as the government’s provision of an economic benefit to one of the entities.

International Accounting Standard No. 21

International Accounting Standard No. 21 is known as Foreign Exchange Rates, and this standard is concerned with the way in which foreign currency transactions are calculated and the financial statements of foreign operations are translated into the functional currency of companies (defined as the currency of the primary economic environment in which companies operate). Which exchange rates to use and how to report any changes in them.

International Accounting Standard No. 23

International Accounting Standard No. 23 is known as Borrowing costs, which are the costs associated with the purchase, construction or production of an asset, in addition to the benefits and other costs associated with the process of borrowing money, and this standard provides guidance on how to measure borrowing costs.

International Accounting Standard No. 24

International Accounting Standard No. 24 is known as Related Party Disclosure, and this standard is used to ensure that the company's financial statements contain the necessary disclosures that affect its financial position, and thus affect its profits and losses.

International Accounting Standard No. 26

International Accounting Standards No. 26 is known as Accounting and Reporting by Retirement Benefit Plans, and this standard is used to determine the minimum level of financial statements required for retirement benefit plans.

International Accounting Standard No. 27

International Accounting Standard No. 27 is known as Separate Financial Statements, as this standard describes the disclosure of investments for subsidiaries and joint ventures between entities.

International Accounting Standard No. 28

International Accounting Standard No. 28 is recognised as Investments in Associates and Joint Ventures. This standard is concerned with accounting for investments in joint ventures with associate companies (defined as companies over which the investor has a strong influence through reference in their financial and operational decisions) using the equity method. .

International Accounting Standard No. 29

International Accounting Standards No. 29 is recognised as Financial Reporting in Hyperinflationary Economies. This standard is used with entities whose functional currency is the currency of a hyperinflationary economy. Hyperinflation is described via many factors, such as: prices, activity and wages linked to a fee index.

International Accounting Standards No. 32

International Accounting Standards No. 32 is known as Presentation of Financial Instruments, whereby financial instruments are classified as financial assets, financial liabilities and equity instruments.

International Accounting Standard No. 33

International Accounting Standards No. 33 is known as earnings per share, and this standard is used to deal with and calculate earnings per share, for example: convertible assets and guarantees.

International Accounting Standards No. 34

International Accounting Standard No. 34 is known as interim financial reports, or interim financial reports that reflect financial statements for a period less than a financial year, and this standard is used with entities that comply with international accounting standards, where the financial statements for the current period are presented and compared with the previous period in the statement of position financial.

International Accounting Standards No. 36

International Accounting Standards No. 36 is known as impairment of assets, and this standard is that an asset should not be included in the financial statements by more than the highest amount that can be recovered through its use or sale, and this standard applies to all assets except for assets whose value is impaired, such as: inventory , assets arising from employee benefits.

International Accounting Standards No. 37

International Accounting Standards No. 37 is known as Provisions, Contingent Liabilities and Contingent Assets. This standard specifies the accounting and disclosure of provisions (defined as a commitment that is uncertain in terms of time or amount), contingent liabilities (which may be a legal obligation or a constructive obligation) and contingent assets.

International Accounting Standards No.  38

International Accounting Standards No. 38 is known as Intangible Assets, and is used to recognize, measure and disclose intangible assets, for example: trademarks, copyrights, patents.

International Accounting Standards No. 39

International Accounting Standard No. 39 is recognized as Financial Instruments: Recognition and Measurement. This standard is concerned with the recognition and measurement of financial assets and financial liabilities. Financial assets are recognized when the company becomes a party to the contract of the financial instrument, while the financial asset is measured at fair value, followed by measurement using the financial instrument.

International Accounting Standards No. 40

International Accounting Standards No. 40 is known as investment property, and investment property is defined as the land or building that is held to obtain its rent or capital increase, or unoccupied land and buildings that are not used in corporate business, and this accounting standard is based on the measurement of investment property According to the cost, then the fair value model or the cost model is adopted.

International Accounting Standards No. 41

International Accounting Standard No. 41 is known as Agriculture, and this standard is concerned with the accounting treatment, presentation of financial statements and disclosures related to them in agricultural activities responsible for managing the biological transformation of biological assets and harvesting or transforming them into agricultural products or additional assets.

International accounting standards that have been modified

Many of the 41 accounting standards have undergone amendments, and the following are these standards:
  • International Accounting Standards No. 3: IAS 3 was amended in 1989 and replaced by IAS 27.
  • International Accounting Standards No. 4: is the standard responsible for accounting for depreciation and was withdrawn in 1999.
  • International Accounting Standard No. 5: It is the standard responsible for the information to be disclosed in the financial statements, and it was amended in 1998, when it was replaced by International Accounting Standard No. 1.
  • International Accounting Standards No. 6: is the standard responsible for accounting responses to changing prices, and has been replaced by IAS 15.
  • International Accounting Standard No. 9: It is the standard responsible for accounting for research and development activities, which was replaced by International Accounting Standard No. 38 in 1999.
  • International Accounting Standard No. 13: It is the standard responsible for presenting current assets and current liabilities and has been replaced by IAS 1 in 1998.
  • International Accounting Standard No. 25: It is the standard responsible for accounting for investments and has been replaced by IAS 39 and IAS 40 in 2001.
  • International Accounting Standard No. 27: It is the standard responsible for consolidated and separate financial statements and has been superseded by International Financial Reporting Standards No. 10, 12 and 27 in 2013.
  • International Accounting Standard No. 28: It is the standard responsible for investments in associates and has been replaced by International Accounting Standard No. 28 in 2011 and International Financial Reporting Standard No. 12 in 2013.
  • International Accounting Standard No. 30: It is the standard responsible for disclosure in the financial statements of banks and similar financial institutions. It was replaced by International Financial Reporting Standard No. 7 in 2007.
  • International Accounting Standards No. 31: It is the standard responsible for interests in joint ventures. It has been replaced by IFRS 11 and IFRS 12 in 2013.
  • International Accounting Standard No. 35: It is the standard responsible for discontinued operations and has been replaced by the International Financial Reporting Standard in 2005.
  • International Accounting Standards No. 39: the standard responsible for financial instruments: recognition and measurement, has been replaced by IFRS 9.
Based on the foregoing, the number of international accounting standards is 41, some of which have been replaced by another standard, and some have been replaced by International Financial Reporting Standards, and this was done as needed.

Pros and cons of international accounting standards?

International accounting standards are the standards that are followed in conducting financial transactions, which are constantly developed, and more than 150 countries rely on these standards in preparing financial reports, and this confirms their multiple advantages, but there must be some negatives to which these standards are exposed, and the following will be Clarify the pros and cons of international accounting standards:

Advantages of international accounting standards

The use of international accounting standards is reflected in providing financial transactions with a higher quality, achieving more profits for these companies and reducing their losses and other features that emphasize the importance of international accounting standards, and the following are the most prominent advantages of international accounting standards:
  • Facilitate ethical compliance, consistent standards of behavior and ethics across cultures and countries.
  • Improving international investments as these standards facilitate the ability to compare performance with international companies.
  • Flexibility to take into account expected and unexpected changes that occur in different business environments.
  • Transparency in applying the same standards around the world, which contribute to reducing the cost of capital and providing higher liquidity.
  • Reducing the time, effort and expenses required to prepare various reports.
  • The ability to monitor subsidiaries located in multiple countries.
  • Simplify the system by creating a single central body of reference for all.
  • A higher return on equity.
  • Increasing and improving foreign investment rates around the world.

Disadvantages of international accounting standards

International accounting standards offer many advantages that increase the possibility of comparison, auditing and reduce errors, but in return, this eliminates competition and incentives for innovation and thus will affect quality, so despite the positives provided by international accounting standards, there are many negatives that occur when Following these standards. Among the disadvantages of international accounting standards are the following:
  • Increased implementation cost for small businesses.
  • The need to provide global consistency in auditing and enforcement that can further improve the efficiency of audits and the understanding of information.
  • The flexibility offered by international standards can lead to many manipulations of the standards, as companies can choose which methods they want to include in their report.
  • Increasing the volume of accounting work that accountants must carry out in accordance with accounting standards.
  • Changes in standards require changes in the curricula offered by business schools.
Although there are many advantages and disadvantages provided by international accounting standards, these standards are a way to reduce the barriers that stop global expansion, as these standards are one of the means that can be used to increase global expansion.
Comments
No comments
Post a Comment



    Reading Mode :
    Font Size
    +
    16
    -
    lines height
    +
    2
    -