IFRS - what is it? IFRS: reporting, standards

According to available official data, in 2015, the introduction of such regulations as international financial reporting standards of specific categories will become mandatory. Most often you can find the abbreviation of this concept - IFRS.

Such categories will include:

• Participants-professionals of the stock market;
• Commodity exchanges;
• Non-state pension funds;
• Clearing companies;
• Joint-stock investment funds;
• Managing organizations of the above categories.

It makes sense to start to determine the question: "IFRS - what is it?". This concept is deciphered as a set of specialized documents, more precisely standards, through which the procedure for creating financial statements that is freely available to external users is regulated.

IFRS vs. the Russian accounting system

First and foremost, there is a difference in the end users with information that includes the relevant accounting indicators grouped according to the above standards. In particular, the Russian model was aimed at public administration and statistics, and international - on investors, enterprises and financial institutions. As a consequence, in the differences with respect to interests and requirements for financial information, there are also different principles on which the procedure for the formation of this reporting is based.

Thus, the mandatory rule in IFRS is the priority of the content regarding the form of submission of previously mentioned information. Speaking about the Russian accounting system, this moment is most often omitted.

A practical example may be the situation in which PBU considers preferred shares as part of a company's capital, although there are very few distinctive features from bonds regarding their economic nature. In accordance with IFRS, these features are significant in order not to reflect them in the composition of capital.

The purpose of implementing IFRS for Russian enterprises

In order to form adequately perceived and understandable financial reporting to users of different countries, international standards were introduced. Their goal is to unify the compilation of the set of documents under consideration and to provide data on the activities of a company.

It is worth highlighting the list of documents that determine the financial statements. IFRS are aimed at their unification with respect to the order of creation, namely:

• balance sheet;
• Statement of cash flows ;
• Profits and Losses Report;
• A report on changes in capital or other transactions of this orientation;
• Accounting policy.

Along with the above-mentioned reports, enterprises can also form certain surveys for the management team, in which the profit indicators of the company are displayed.

IFRS - what is it?

This accounting system looks like a certain set of documents, including the following elements:

• Preface to the provisions of the standards in question;
• Clarification of the fundamental principles of preparation and form of providing this type of reporting, in essence the concept of IFRS;
• Standards and relevant interpretations to these documents.

Each of the above documents has its own significance, but it is used exclusively in conjunction with other elements. Thus, from the above list, it means that IFRS are standards, each of which has a definite structure.

The semantic aspect of the standards of the accounting system under consideration

They establish rules that determine the procedure for deciphering individual transactions performed in the course of the core business of the enterprise and reflected in the financial statements.

It is important to note that the standards adopted by the relevant body before 2001 are called the International Accounting Standards or IAS, and then, since 2001, the International Financial Reporting Standards, the abbreviation of which is the IFRS.

The above-mentioned standards

The main IFRSs developed before 2001 include:

1. "Presentation of Financial Statements" (IAS No. 1).
2. "Reserves" (IAS No. 2).
3. "Cash Flow Reports" (IAS No. 7).
4. "Accounting Policies, Changes in Accounting Accounting Estimates and Errors" (IAS No. 8).
5. "Events after the balance sheet date" (IAS No. 10).
6. "Contracts for construction" (IAS No. 11).
7. 7. "Income Taxes" (IAS No. 12).
8. 8. "Segment reporting" (IAS No. 14).
9. 9. "Fixed Assets" (IAS No. 16).
10. "Lease" (IAS No. 17).
11. "Revenues" (AS No. 18).
12. "Employee Benefits" (IAS No. 19).
13. "Accounting for Government Grants and Disclosure of Information on Public Assistance" (IAS No. 20).
14. "The Impact of Changes in Exchange Rates" (IAS No. 21).
15. "Borrowing Costs" (IAS No. 23).
16. "Disclosure of Information" (IAS No. 24).
17. "Accounting and reporting on pension schemes (pension plans)" (IAS No. 26).
18. "Consolidated and Separate Financial Statements" (IAS No. 27).
19. "Investments in Associates" (IAS No. 28).
20. "Financial Reporting in Hyperinflationary Economies" (IAS No. 29).
21. "Disclosure of Information in the Financial Statements of Banks and Similar Financial Organizations" (IAS No. 30).
22. "Participation in joint activities" (IAS No. 31).
23. "Financial instruments - disclosure and presentation of information" (IAS No. 32).
24. "Earnings per share" (IAS No. 33).
25. "Interim Financial Reporting" (IAS No. 34).
26. "Impairment of Assets" (IAS No. 36).
27. "Estimated liabilities, contingent liabilities and contingent assets" (IAS No. 37).
28. "Intangible Assets" (IAS No. 37).
29. "Financial Instruments - Recognition and Measurement" (IAS No. 39).
30. "Investment Property" (IAS No. 40).
31. "Agriculture" (IAS No. 41).

International Financial Reporting Standards

The list of standards of the accounting system adopted since 2001 is as follows:

1. "Adoption of International Financial Reporting Standards for the first time" (IFRS No. 1).
2. "Share-based payments" (IFRS No. 2).
3. "Association of Enterprises" (IFRS No. 3).
4. "Insurance Contracts" (IFRS No. 4).
5. "Non-current assets held for sale and discontinued operations" (IFRS No. 5).
6. "Exploration and evaluation of mineral resources" (IFRS No. 6).

What is the sign of the current year regarding the accounting system under consideration?

From official sources it became known about the readiness of the last volume of IAS 2014, called "Red Book". It contains rules on international accounting, including those that will enter into force after January 1 of the current year. An example is the amendments to the ninth standard, called "Financial Instruments", adopted since 2001. There are also two sets of annual changes relating to IFRSs 2011-2013 and IFRS 2010-2012, one interpretation on fees, the constitution of the IFRS Foundation, a detailed work plan.

What is good about this accounting system?

In order to form a correct international financial report, IFRS will be indispensable in helping.

It is worth highlighting a number of advantages of this accounting system, which may be associated with the activities of the following subjects:

1. Financial analysts, investors, as this is due to clarity, transparency, reliability and lower costs.
2. Companies, because the costs of measures to attract investment are reduced, there is a unified accounting system, there is no need to harmonize financial information, order both in internal and external accounting.
3. Auditors: in view of the fact that there is uniformity in the fundamental principles of accounting, it is possible to participate in the adoption of relevant standards, and large-scale trainings are held.
4. The developers of these standards themselves - in connection with the fact that this is an excellent opportunity to share experiences, the basis for future national standards and the convergence of existing ones.

All of the above helps to get an answer to the question: "IFRS - what is it?"

How to smooth the process of transition to IFRS?

The tasks of reforming include the following:

1. Special training of accountants to the level of professional ownership of the basics of the accounting system in question.
2. Strengthening in the minds of managers of enterprises a real interest in providing truthful and objective information.
3. The final distinction between accounting for tax, financial and management.

The importance of the transition is due to the fact that IFRS standards are a trade-off between the world's major accounting systems.

Attractiveness of accounting reform for enterprises around the world

The IFRS financial statements under consideration can facilitate companies from different countries entering the world-class capital markets, as well as increasing the comparability of information, making it more transparent for external users.

Specifically, Russian enterprises will be able to speak the same language with their foreign counterparts and strengthen their business positions in foreign markets from the point of view of equal opportunities, thereby opening up numerous prospects for international capital markets.

The introduction of IFRS will also have a positive impact on the quality of management accounting, in particular, on its improvement, and will also contribute to the updating of information systems and staff motivation.

In addition, the attraction of foreign capital without the reporting, prepared in accordance with IFRS, is to a considerable extent difficult to date. And it does not matter whether this will be done either with the help of Western banks, or by accessing the stock market abroad, or by attracting private investments from abroad. Accounting, drawn up in accordance with the PBU, a potential foreign investor, most likely, will not understand. Therefore, it is worthwhile to take care of the formation of the reporting, regulated by IFRS.

Companies are aware of the fact that in the near future international standards will become national. For many firms, IFRS statements are required today to provide a significant competitive advantage by attracting resources in international borrowing markets such as bonds, loans or IPOs.

Thus, all of the above helps to clarify the issue: "IFRS - what is it?"