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Study of the IFRS/IAS standards

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  1. Corporate Overview
    1. Background
    2. Sectors of activity
    3. The key figures
    4. The organization of the group
  2. The operations of the IKEA Group
    1. The leader's personality and the "IKEA spirit"
    2. The IKEA concept
    3. Analysis of the group's strategy
    4. The competition
  3. The internationalization strategy of the IKEA Group
    1. Why internationalize?
    2. The phases of internationalization of the IKEA Group

The chief executive of KPMG, Jean-Luc Decornoy, had announced in June 2006 that the goal of harmonization of financial statements was not reached between accounts and areas between countries. This statement raises many questions about the reasons, and this is an invitation to reflect on the theme of interpretation and the exemption to IAS / IFRS.

Financial scandals in Europe and the United States from the early 2000s, led a movement to restore public confidence of investors and savers. This movement aims to provide tools for the disclosure of a better quality. Across countries, accounting practices can have significant differences. These differences prevent any comparable businesses operating in an international environment together.

The first two IAS standards were born in 1975. Nevertheless, it was in 2003 that the first final version of IFRS and interpretation were published in 2003. However the official implementation was declared on January 1, 2005 in the EU for listed companies. Since 2007, the repository of IFRS is the repository of common law.

IFRS may be applied to all States that request it. However in 2007, the EU is the main user of these standards since "the EC Regulation 1606/2002 of the EU requires all listed companies publishing consolidated accounts to prepare financial statements as of 1 January 2005 IAS / I.F.R.S." This repository includes, after adoption of the European Union: IAS numbered from 1 to 41 which may be amendments to IFRS numbered 1 to 8, SIC interpretations, IFRIC interpretations numbered from 1 to 14.

The two goals of the standards are set up for better accounting transparency and to homogenize the financial statements. Before the change of status in 2001, these standards were called IAS.

IAS only concerns the papers of balance sheet, income statement and the accompanying tables. Since 2001, the standards were called IFRS. Their field of standardization is more important since they define all the financial information that could be published. This change in status is due to a reconciliation process between the FASB, the U.S. standard setters and the IASC, international standard-setter.

The objectives of this merger were part of a mutual recognition of standards, and also to meet the needs of investors and so the IASCF is created. Within this organization is the IASB a revised IAS that would have written and developed the IFRS.

These standards are not rules as in the General Accounting Plan, these are principles and these principles need to be interpreted to be applied. The interpretation process is long. Logically the process, the longer it is possible to find differences between all interpretations.

One can generalize by saying that each company / group there is a different interpretation.The introduction of IFRS accounting is a revolution that changes the whole organization of the company. Its implementation is heavy on the financial establishment of a new accounting organization in a company.

To make this event more flexible in its implementation, the transition procedures were put in place. The advantage of these procedures is that they are better suited if any changes in interpretation. But above all they can optimize the costs of this important project.

Tags: Study, IAS, IFRS accounting, the implementation of IFRS

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