The IASB took over the functions of its predecessor IASC, among them the creation of accounting standards, of enforceable compliance, that contain reliable, comparable and transparent information.
These standards take the name of IFRS and are applicable to general purpose financial statements, which seek to meet the expectations of users.
For the elaboration of the international accounting standards there is a special council which is in charge of the revision of the standard and its approval.
International financial reporting standards
In order to establish accounting standards, responsible entities are needed, which have the responsibility to issue them, the person in charge was the International Accounting Standards Committee (IASC), who was already exercising this function by issuing international accounting standards (IAS), this was replaced by the International Accounting Standards Board (IASB), which in turn issues International Financial Reporting Standards (IFRS).
The IASB is made up of fourteen members, who have the experience and knowledge necessary to establish standards that help financial reporting. Its function is aimed at achieving international accounting standards, that is, being able to provide more information on the knowledge of the standards of other countries to achieve a homogeneity of the accounting and financial information of organizations throughout the world.
Many countries seek accounting standards so that economic relations in the world have a similar approach to the market, since their objective is that their activities have a high quality and understandability, which help in decision-making. Furthermore, by means of IFRS, it is ensuring that the financial statements of an entity are transparent to users and comparable from one period to another.
When an IFRS is implemented it takes effect from its publication, the approved discussion text of a standard is in English and published by the IASB, “it can approve translations into other languages, provided the translation is prepared in accordance with a procedure that provides assurance about the quality of the translation ”.
Currently, the IASB has issued seven IFRS, it should be remembered that these can be modified or repealed at any time, since the different needs of the information users are increasing every day, requiring many times the implementation of an accounting standard for what For the preparation of these, accounting and financial professionals participate, thus guaranteeing that the application of IFRS will cover accounting needs.
IFRS
The objectives of IFRS are to explain the information that must be managed in the financial statements at the time of their transactions, all this in order to ensure the quality and comparability that is done in the periods, with clear evidence that helps users to make decisions which serve to recognize all their assets, obligations and rights that they may find in the entities.
The current financial statements must be prepared in accordance with current IFRS since, in this way, the users of the information will know the real value of the goods, and the costs of their sales, in order to evaluate the performance of the entity, the risks that may have from their activities and the possible opportunities that may arise in a market.
advice
"In 1995 the IASC established an international advisory council" in order to promote international accounting standards, this council also participates in the process of revising a standard, since before being issued, a special committee draws up and publishes a Draft discussion which includes the proposed standards and possible associated accounting problems, this is done in order for stakeholders to comment on them and present their points of view. Once this process is done, the special committee takes into consideration all the comments on the discussion draft to send to the council.
The draft, if approved by the council, "will be submitted to one to three months of public discussion", to take the comments and prepare a new one, to be approved and published definitively.
Conclusions
- The new issuing body of Accounting Standards, the IASB is in charge of creating IFRS, which will be applicable to general purpose financial statements. With accounting standards, the accounting information is intended to be comparable, understandable and The IASB generally seeks to implement a set of standards that are applicable at the international level, with the aim that accounting management is the same throughout the world. For the development of standards, it is necessary to review and approve the draft standard through special advice.
Bibliography
MONTILLA GALVIS, Omar de Jesús, MONTES SALAZAR, Carlos Alberto, MEJIA SOTO, Eutimio. International Accounting and Financial Reporting Standards. University of Quindío Armenia 2006.
International Accounting Standard Board. International Accounting Standards 2001.
MEJIA SOTO, Eutimio, MONTES SALAZAR, Carlos Alberto, MONTILLA GALVIS, Omar de Jesús. International accounting. University of Quindío Armenia 2006.
Mejía soto Eutimio, Montes Salazar Carlos Alberto, Montilla Galvis Omar de Jesús, international accounting chapter 7, page 91
Mejía soto Eutimio, Montes Salazar Carlos Alberto, Montilla Galvis Omar de Jesús, international accounting chapter 7, page 84
Mejía soto Eutimio, Montes Salazar Carlos Alberto, Montilla Galvis Omar de Jesús, international accounting chapter 7, page 85
