In March 2002, the European Council (under EC Regulation 1606/2002 OJ of 11 September 2002) has made mandatory the application of international accounting standards for consolidated accounts of listed companies from January 1, 2005. All the international standards adopted by the ARC (Accounting Regulator Committee) as on 16 July 2003 is published in the Official Journal of the European Union dated October 13, 2003 (except IAS 32 and IAS 39 Financial Instruments).
These standards of listed companies may be extended to all businesses. By February 2004, the IASB had considered the creation of parallel standards and simplified them for small and medium enterprises (SME Small and Medium Enterprises). The approach of IFRS is different from the approach of the General Accounting Plan. It comes from a legal approach to accounting and is organized by the French government while the IFRS are created by organizations that are independent of a private nature.
The French accounting law leaves a significant part of the legal nature of the accounting operation while IFRS Anglo-Saxon retains the economic aspect of the transaction regardless of its form. Similarly, tax rules are still predominant in the General Accounting Plan. Accounting rules are often imposed by fiscal constraints to make deductible expenses such as regulatory provisions, rules of depreciation or provisioning. Purely fiscal operations affect the reading of the accounts.
The approach of IFRS is different from the approach of the General Accounting Plan. One - it comes from a legal approach to accounting organized by the French government while the IFRS are created by organizations independent of a private nature. The French accounting law leaves a significant part of the legal nature of the accounting operation while the IFRS Anglo-Saxon retains mainly the economic aspect of the transaction regardless of its legal form.
Thus capital taken in "leasing" will not be recorded in balance sheet accounts as the accounting; the company was the owner of the property at the end of the contract so that, after international standards, they will be saved as part of the productive tool. International standards provide not only the registration of leasing transactions, but also leases from the time the transaction can be analyzed as the financing of the acquisition of an asset (finance lease). The entries are then the same as if the company had acquired the property. Similarly, tax rules are still predominant in the General Accounting Plan.
Accounting rules are often imposed by fiscal constraints to make deductible expenses such as regulatory provisions, rules of depreciation or provisioning. Purely fiscal operations affect the reading of the accounts.
The recognition, for example, accelerated depreciation or investment allowances, for tax reasons have increased special charges and provisions of the balance sheet wrongly. Under IFRS, these liabilities should be treated outside the accounts, only the tax savings resulting companies listed in the accounts.
To understand the change from "the IFRS approach, we must analyze the objectives assigned to the accounts. The chart of accounts allowed the measurement of the business assets and the extent of its profitability. The IFRS framework is far more of an economic tool and its performance. The conceptual framework established in 1989 defines the rule of economic reality over appearance. Accounting information is to represent faithfully the transactions it has in accordance with their substance and economic reality and not merely their legal form (substance over form).
Tags: IFRS, financial statements, conceptual framework of financial statements
[...] There are no financial statements of proposed standards. A major accounting principle PCG, historical cost accounting, is partly challenged by IFRS. The conceptual framework indicates that "the assets are carried at the amount of cash or cash equivalents paid or the fair value (fair value) of the consideration given to acquire them at the time of acquisition."Historical cost is the main basis of accounting, but the fair value can be substituted for such property. One goal is to provide the reader financial statements, financial information mastered to explain fluctuations in the result and to demonstrate the handling qualities of an enterprise (D. [...]
[...] Current assets less current liabilities will reflect the need for working capital plus cash and financial instruments used to finance the business in the short term. The notion of stable funding remains the same in the non-current balance sheet and FRNG since falling due within one year from borrowings for a period exceeding one year from the original part of the balance sheet non-current liabilities. By cons, debt originally underwritten at least one year, such as crop loans is included in current liabilities. [...]
[...] P. Danjou, head of business accounting of the COB nevertheless believes that the adoption of IAS will have the effect of unifying the presentation of financial statements in Europe and to bring forward European and U.S. presentations. Companies are questioning the presentation of their future financial statements to international standards. A working group established in early 2004 by the CNC (National Accounting Council) chaired by G. Zancanaro recently proposed a model statement. [...]
[...] The conceptual framework of financial statements under IFRS Introduction The European Council of March 2002 (EC Regulation No. 1606/2002 Official Journal of 11 September 2002) has made mandatory application for international accounting standards for consolidated accounts of listed companies from 1 January 2005. All international standards were adopted by the ARC (Accounting Regulator Committee) in July and were published in the Official Journal of the European Union in 13 October 2003 (except IAS 32 and IAS 39 on financial instruments). [...]
[...] Difference between functional assessment and IFRS balance sheet a. Current assets less current liabilities Current assets less current liabilities of the balance sheet as defined by IFRS 1 is: - If necessary working capital to operate the PCG; - The non-operating working capital items with maturities less than 12 months; - Subscribed to the debt with a maturity of less than 12 months; - In cash. The notion of an exceptional level of profit or loss and non-operating in the balance sheet disappears IFRS. [...]
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