Summary of IFRS

8/18/2019 Summary of IFRS

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Name: Harianto Pratama Putera

NPM: 022113237Class: 6B (Konesentrasi Akuntansi Keuangan)

Tugas 1

International Financial Reporting Standards or “IFRS” is a set of accounting standardsdeveloped by an independent, not-for-profit organization called the International AccountingStandards Board (IASB). The development of IFRS came from a need to find common groundamong financial reporting standards among countries that do business together. Before therewas IFRS each country followed their own set of rules or set of financial reporting standardsusually GAAP, thus making it difficult for accountants to consolidate financial statements amongcompanies that are publicly traded internationally.

IFRS is a set of standardized international accounting standards that dictates and stateshow certain transactions and events should be reported in financial statements. IFRS in generalrelies on accounting principles more than a hard set rules that each company has to followwhich in contrast, is a big difference when compared to the GAAP which most publically tradedcompanies use when making financial statements. IFRS gives financial mangers greater

freedom to prepare their companies financial statements.IFRS has become the global standard for financial reporting of public entities.

Approximately 120 nations and reporting jurisdictions permit or require IFRS for domestic listedcompanies, although approximately 90 countries have fully conformed with IFRS aspromulgated by the IASB and include a statement acknowledging such conformity in auditreports. Other countries, including Canada and Korea, are expected to transition to IFRS by2011. Mexico will require IFRS for all listed companies starting in 2012. Japan has introduced aroadmap for adoption that it will decide on in 2012 (with a proposed adoption date of 2015 or2016) and is permitting certain qualifying domestic companies to apply IFRS from fiscal yearsending on or after March 31, 2010. Still other countries have plans to converge their nationalstandards with IFRS.

The IFRS refers to the entire body of AISB pronouncements including standards andinterpretations approved by the IASB and IASs and SIC interpretations approved by thepredecessor International Accounting Standards Committee.


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The developm ent of IFRS is broken do wn into 6 par ts ,

Part 1: Setting the Ag enda

The IASB (International Accounting Standards Board) looks at the needs of the investorsto establish areas that need attention. This part of the development process is also known asestablishing a work plan, reviewing and reevaluating what needs to be added to IFRS agenda.The IASB considers the following

the relevance to users of the information and the reliability of information that could beprovided;

whether existing guidance is available;

the possibility of increasing convergence;

the quality of the standard to be developed; and

resource constraints.

In attempt to identify key aspects the IASB questions its staff to indicate issues that needfurther review and attention, that can be added to future agendas.

New issues also arise from a change in the IASB’s Conceptual Framework, furthermore theIASB considers new agendas from other standard setters such as the IFRS Advisory Counciland the IFRS Interpretations Committee, and staff research. Also IASB receives requests to editor adjust already publicized materials from 3 rd party groups that have common issues that areraised thus making the IASB consider putting them in into the agenda.

IASB meetings, before any new standard is put into the agenda the IASB meets with the

IFRS advisory council and accounting standard-setting bodies before taking on any newprojects. The IASB also considers convergence initiatives among other accounting standard-setters.

In order to put any conclusions from these meetings and before adding anything to theagenda the IASB holds a vote in their public meetings, in order it to pass each agenda itemneeds a majority vote.


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Part 2: Plannin g th e Project.

In this step the IASB considers whether or not to conduct a certain project alone or do a joint venture with another standard-setter. After gauging interest and the nature of certain issuesthe IASB most likely will form a consultative group. Groups give the International AccountingStandards Board (IASB) access to additional practical experience and expertise. The IASBnormally establishes consultative groups for its major projects . The Staff is handpicked by twomost senior members of the technical staff the Director of Technical Activities and the Directorof research. From there the project manager makes a project plan under the supervision of saiddirectors. In addition the team may include other members of standard-setting groups asdeemed necessary by the IASB.

Part 3: Development and Publ icat ion of a discussion paper

In this step, albeit not mandatory, the IASB publishes a discussion paper as its firstpublication on an issue to explain and solicit feedback from constituents. If the IASB decide not

to publish a discussion paper they will explain why.Normally a discussion paper includes the following

a comprehensive overview of the issue;

possible approaches in addressing the issue;

the preliminary views of its authors or the IASB; and

an invitation to comment

This method might differ if another accounting standard-setter writes and develops the researchpaper

Discussion papers are written as a result of either of the following

a research project being conducted by another accounting standard-setter; or

as the first stage of an active agenda project carried out by the IASB.

If the discussion paper is a result of a research project being conducted by anotheraccounting standard setter, the discussion paper is drafted by another accounting standardsetter then published be the IASB. Issues that are written and brought up inside said discussionpaper are later reviewed and discussed in IASB meetings, and publication of such papers needsa majority vote by the IASB.

If the discussion paper has views of more than one author the IASB must review thedraft discussion paper to ensure the analysis is proper and merits public invitation forcomments. For discussion papers related to agenda items that are under IASB jurisdiction anddirection the IASB develops the paper or its views on the basis deducted from staff researchand recommendations, as well as suggestions made by the IFRS Advisory Council,Consultative groups and standard-setters and presentations from invited parties.

All technical issues in the draft paper are discussed in public sessions.


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Part 4: Developmen t and Publication o f an Expos ure Draft.

Publication of an exposure draft is a mandatory step in due process.

Regardless of whether or not a discussion paper is published by the IASB, an exposure draft isthe main communication line for consulting with the public. An exposure draft is totally differentcompared to a discussion paper, an exposure draft is a proposal in a form of a proposedstandard or an amendment to an existing standard.

The development of an exposure draft begins with three things the IASB considers:

issues on the basis of staff research and recommendations;

comments received on any Discussion Paper; and

Suggestions made by the IFRS Advisory Council, Consultative Groups and accountingstandard-setters, and arising from public education sessions.

After deciding firmly on solutions to all issues at its meetings, the IASB instructs the staff to draftthe Exposure draft. When the draft is finished and the IASB has accepted it (by voting on it) theIASB publishes it for public comment.

Part 5: Developmen t and pub lication o f an IFRS

The development of an IFRS is done during IASB meetings, when the IASB reviews allcomments that have been received from the exposure draft.

After all issues that came up from the exposure draft the IASB considers whether or not to re-publish a second exposure draft to highlight all changes or revised propels that were an issue inthe first exposure draft. In considering a re-exposure draft the IASB considers:

identifying substantial issues that emerged during the comment period on the ExposureDraft that it had not previously considered;

assessing the evidence that it has considered;

evaluates whether it has sufficiently understood the issues and actively sought the viewsof constituents; and

considers whether the various viewpoints were aired in the Exposure Draft andadequately discussed and reviewed in the basis for conclusions.


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Drafting the IFRS: If the IASB finds that publishing a re-exposure is needed than all steps inthe due process are followed from the exposure draft and submitted for another round of publiccomments. This decision is reached in IASB meetings. When all parties are satisfied with thedraft there are no more issues with it, the IASB instructs the staff to draft the IFRS

Pre-Ballot Draft: A pre-ballot draft is usually subject to external review, normally by the IFRIC.Shortly before the IASB ballots the Standard, a near-final draft is posted on eIFRS.

Finally, after the due process is completed, all outstanding issues are resolved, and the IASBmembers have balloted in favor of publication, the IFRS is issued.

Part 6: Procedur es after the IFRS is issued .

After and IFRS is issued the IASB holds regular meetings with 3 rd party bodies and otherstandard-setting bodies to help with unanticipated issues that arose with the publication of the

IFRS. Meaning the impact, the results and underlying issues that came up because of theimplementation of the IFRS.

The IFRS foundation also holds regular educational events to ensure the properimplementation and understanding and consistency in the application of the IFRS.

After a certain amount of time the IASB may implement studies if one of the following occurs:

its review of the IFRS’s application;

changes in the financial reporting environment and regulatory requirements; and

comments by the IFRS Advisory Council, the IFRS Interpretations Committee, standard-

setters and constituents about the quality of the IFRS.Those studies may result in items being added to the IASB’s work plan.

These steps are just a fundamental understanding of how one IFRS is developed andimplemented. It’s a basic understanding o f how IFRS came to be.


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Interpretation o f IFRS and Maintenance:

In this part the IFRS is maintained by the IFRS maintenance committee (interpretationscommittee) and the responsibilities of this committee include the identification of divergent

practices that have emerged for accounting for particular transactions, cases of doubt about theappropriate accounting treatment for a particular circumstance or concerns expressed byinvestors about poorly specified disclosure requirements.

The objective of this committee is to interpret applications of the IFRS, provide guidanceon reporting issues and other tasks that are assigned by the IASB. Both bodies see theimportance of achieving a balance between the principle-based approaches of IFRS andproviding guidance with sufficient detail to ensure that it is useful and practical.

Maintenance of the IFRS and the procedure used by the IFRS interpretations committeeis called due process. Due process has different stages that occur before an IFRS is amendedor an issue is added to the agenda. These processes include:

a) Identification of matters . All parties that are interested in amending or proposing anew IFRS are invited to identify an issue and bring it up in public meetings

b) Proposed Ag enda I tems , in this stage the IFRS committee debate whether or not toadd items that were identified in the previous stage to the IFRS agenda. When debating theseissues the committee considers the effect of the proposed issue, the betterment of the reportingstandard through deduction or change of method in the financial report, whether or not the issuecan be resolved within the confines of the conceptual framework of financial reporting and lastlywhether or not the issue can be resolved in a minimum scope so that the committee doesn’t waste time with one issue. Issues that are do not make it to the agenda are published in whatwe call a constative period where the issue that has been rejected is published as rejected.

c) Meeting s and Voting , when an issue has made it to this stage the committee willhold meetings specifically to talk about and go over the specific issue. These meetings followIASB standard and is usually held via teleconference. If a certain issue has reached its peak thecommittee will vote whether or not to put it on the IFRS agenda

d) Development of mino r or narrow-scope amendments to Standards , in this stagethe committee may update and improve already known standard without IFRS advisory council.The committee will consider first drafting an exposure draft in order to summarize it ’s proposedamendments.

e ) De ve lo p m en t o f In ter p ret at ion s

Interpretations are developed by the Interpretations Committee but, because they arepart of IFRS, they must be ratified by the IASB.

Three members of the IASB usually attend meetings of the Interpretations Committee. Inaddition, a report of each meeting of the Interpretations Committee is presented to the IASB atone of its public meetings. Interpretations are designed for general application and are notissued to resolve matters that are specific to a particular entity.


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A draft Interpretation is developed on which the Interpretations Committee votes. Votingtakes place at a public meeting. General agreement on the draft Interpretation is achieved whenno more than four members have voted against the proposal. Before the interpretation is ratifiedthere is a comment and deliberation period in order to receive feedback and comments frominterested parties. final Interpretation includes:

a. a summary of the accounting issues identified;

b. the agreement reached on the appropriate accounting;

c. references to relevant Standards, parts of the Conceptual Framework and otherpronouncements that have been drawn upon to support the agreement; and

d. the effective date and transition provisions.

The reasons for the Interpretation are set out in a Basis for Conclusions.

When the Interpretations Committee has reached a consensus on an Interpretation, theInterpretation is put to the IASB for ratification (in a public meeting) before being issued. When

the Interpretations Committee has balloted the Interpretation it is submitted to the IASB forratification. Ratification of an Interpretation takes place in a public meeting of the IASB andrequires a supermajority, the same level of support by IASB members as is required for a newor amended Standard. The IASB votes on the Interpretation as submitted by the InterpretationsCommittee. If an Interpretation is not approved by the IASB, the IASB provides theInterpretations Committee with reasons for the objection. On the basis of these reasons, theIASB will decide whether the matter should be referred back to the Interpretations Committee,whether it should be added to its own agenda or that no further action should be taken.

Ratified Interpretations are issued by the IASB.


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People behin d th e IFRS and IASB.

Each organization is run by certain people and directed by a board of members, IFRS isno different. Here we will see the background and what he/she has done for the betterment ofthe IFRS.

Wayne Upton : IFRS interpertations committee international director, IASB

Mr. Upton was designated as Director of International Activities in April 2008.In that role, he continues his work assisting both major and transitionaleconomies in making the transition to IFRSs and implementing IFRSs. He alsohandles special projects for the Board.

Mr. Upton is a frequent speaker at accounting conferences and has written anumber of articles on accounting topics. His articles have appeared in The

Journal of Accountancy, Best's Review, Compensation and BenefitsManagement, The Journal of Reinsurance and in publications of the Australian

Accounting Research Foundation, the Financial Accounting Standards Board, the International Accounting Standards Committee, the ACCA (United Kingdom), and the Society of Actuaries.He is also the author of three FASB Special Reports. He is a 1972 graduate of Regis Universityin Denver.

Tony d e BellGlobal Accou nt ing Consu l t ing Services Leadership TeamPwCUni ted Kingdom

As global consultant towards accounting services Mr. Bell helps the IFRScommittee in overseeing how certain issues are dealt with. Tony is a seniorpartner in PwC's Global Accounting Services Group a member of PwC’s IFRSLeadership Team. He also leads the global accounting consulting team dealingwith revenue and liabilities, including income taxes, stock compensation andemployee benefits.

Tony has worked in accounting consulting services for twelve years, beforewhich he served a variety of commercial and industrial clients as an auditor. He

spent eighteen months in 2003 and 2004 seconded to the US National Office in New Jersey andhas led PwC’s global revenue and liabilities accounting technical team since 2006. Tony de Belloften writes about IFRS topics and consults on multiple accounting issues.


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Reinhard Do tzlawGlo bal IFRS PanelKPMGCanada

Reinhad Dotzlaw was appointed to the IFRS Interpretations Committeein May 2013 for a term of three years. Reinhard is the National ManagingPartner, Audit Professional Practice for KPMG Canada. Reinhard currently is amember of the Financial Reporting Advisory Committee of the CanadianSecurities Administrators (CSA), which serves as a sounding board andprovides advice to the CSA’s Chief Accountant’s Committee. He was a memberof the Emerging Issues Com mittee of the CICA’s Accounting Standards Boardprior to its disbandment upon transition to IFRS, which provided timely guidance

on emerging accounting issues. He and his firm oversee multiple accounting issues that rangefrom auditing standards to professional communications. His insight into Canadian markets andnorth American accounting standards make him an invaluable part of the IFRS committee

Carl Dou glasCorpo rate Contro llerCCR Grou pBrazil

Carl Douglas was appointed to the IFRS Committee in July 2014 for aterm of 3 years. Carl is Corporate Controller at CCR Group since 2007, a listed

Brazilian based international investor and operator of transportationinfrastructure, such as toll roads, subways, airports, boats and related business.He is responsible for corporate accounting practices, preparation of financialstatements and obtaining its certification from independent auditors and

approval from audit committee and board Carl was Professor of Accounting and Controlling andCoordinator of under graduation courses in business and in MBA programme from 2005 to2008, as well as independent accounting technical quality assurance at a Brazilian publisher.He was speaker in several accounting and business conferences. He studied businessadministration and did MBA focused in Accounting and Finance at University of São Paulo /FIPECAFI, with extension at Euromed Ecole de Management – Marseille France. He also didM.Sc. in Accounting at São Paulo´s Catholic University. As a former Professor of accountingCarl Douglas has a key part of the IFRS committee knowing the south American markets andaccounting standards that have been used there.


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Bon nie Van Et tenHead of Fiat and Chrysler Group Global Technical Ac coun t ing and A ccoun t ing ResearchChrysler Grou p LL C, United States

Bonnie Van Etten was named Head of Fiat and Chrysler GroupGlobal Technical Accounting and Accounting Research in June 2013. Van Etten

joined Chrysler Group LLC in December 2010 with initial responsibilities overTechnical Accounting and Tax Accounting. In January 2012, her responsibilitieswere expanded to include Chrysler Group Employee Benefits Finance. In June2013, her responsibilities were expanded to include Technical Accounting and

Accounting Research for Fiat S.p.A. as well as Chrysler Group Special Accounting Operations, which includes operational accounting activities for

treasury, restructuring, share-based compensation, and goodwill and intangible valuations. VanEtten is a CPA and holds a bachelor’s degree in Finance from Anderson University in Anderson,Indiana. Her Expertise in American markets is essential the the implementation of the IFRS into

American companies. The conversion from GAAP to IFRS for most American companies can behard but with Bonnie Van Etten the conversion can be made a lot smoother with her

understanding of American markets.

Mikael Hags trömSenior Vice President & Head of Corp orate Financi al ReportingVolvo GroupSweden

Was appointed to the IFRS Interpretations Committee in July 2014 for aterm of three years. Mikael Hagström has worked since 2006 as Senior Vice

President & Head of Corporate Financial Reporting in the Volvo Group. He isresponsible for Financial Reporting and Internal Control. Previous to this, Mikaelwas Head of Corporate Accounting and has also worked for Business Controlwithin the Volvo Group.

Mikael has been chairman of the Swedish Enterprise Accounting Group (SEAG) since 2007,and will be member of IFRIC from July 2014.


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Jon gsoo HanMember of the Korea Accoun t ing Standards Board (KASB)Korea

Was appointed to the IFRS Interpretations Committee in July 2015 for aterm of three years. He has more than 25 years’ experience from practice andacademia in financial accounting and auditing, having also chaired and been amember of many committees and organisations focused on financial reporting.

He is a Board Member of the Korea Accounting Standards Board (KASB) andChairman of the Korea Institute of CPAs’ Accounting Research Committee. Heis a Professor at Ewha Womans University in Seoul, Korea, and has written

many papers on IFRS.

Mr. Han has a PhD in Accounting from the University of Pittsburgh, US, and is a qualifiedCertified Public Accountant in Korea.

Feilong LiExecuti ve Director, Executive Vice President & CFOChina Oil Services LimitedPeople's Republic of Chin a

Was appointed to the IFRS Interpretations Committee in July 2010 for a termof three years. Feilong Li is controller of CNOOC Limited, China's largestproducer of offshore crude oil and natural gas with a dual-listing in Hong Kongand the United States. He is leader of the SOX404 implementation team and thequalified accountant of CNOOC Limited for HKEx listing. He has been a memberof Financial Accounting Standards Advisory Council (FASAC) since 2008.He is aboard member of Petroleum Subcommittee of China Association of General

Accountant and vice principal of China Petroleum and Chemical Statistics Association.He led Accounting/Finance/Taxation Team of CNOOC IPO Working Group back in 1999.


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Bru ce MackenzieManagin g PartnerW Con sul ting Internation alSouth Afr ica

Was appointed to the IFRS Interpretations Committee in July 2014 for aterm of three years. Bruce is the Managing Partner of W ConsultingInternational, a global IFRS Advisory Firm. He is a member of the FinancialReporting Standards Committee of South Africa, and the IASB SMEImplementation Group. He is also a registered IFRS Advisor with theJohannesburg Stock Exchange. Bruce qualified as a Chartered Accountant andRegistered Auditor in South Africa. He worked in the Deloitte IFRS Centre of

Excellence in London before moving to Barclays Capital. Currently he consults withmultinationals, professional firms and institutes on the implementation and application of IFRS.

Joh n O'Grady

Asi a-Pacific IFRS L eaderErnst & YoungAustral ia

Was appointed to the IFRS Interpretations Committee in July 2012 in aterm of three years. He is an Assurance Partner at EY, based in Hong Kong,China and Melbourne, Australia. He is the Leader of EY's Asia PacificProfessional Practice Group (Assurance Quality function), which he has ledsince 1 July 2013. Prior to that time he led the Asia Pacific Area (2010-13) andOceania Area IFRS Groups (2005-10). John is also a member of EY's GlobalIFRS Policy Committee, which is responsible for recommending EY policyaround IFRS application, reporting and interpretation globally. John has overallresponsibility for Professional Practice consultations (including IFRS) within EY

across Asia Pacific, and leads a team of Professional Practice personnel across 24 countries.He is a graduate of University College Dublin and a Fellow of the Institutes of Chartered

Accountants in Australia and in Ireland.


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Sandr a PetersHead of Financial Reporting Polic yCFA Ins tituteUnited States

Was appointed to the IFRS Interpretations Committee in July 2012 for aterm of three years. She is Head of Financial Reporting Policy at CFA Institute,where she leads a global team analyzing and developing policy positions relatedto significant financial reporting, accounting and auditing issues worldwide. Priorto this she was Vice President and Corporate Controller at insurance providerMetLife. Ms. Peters began her career at KPMG, where she rose to the level of

Partner specializing in Financial Services. She is a graduate of the University of Nebraska andholds an MBA from Indiana University. She is a Chartered Financial Analyst and Certified Public

Accountant.

Charlotte Pissarido uManagin g DirectorGoldm an SachsUnited Kingdom

Was appointed to the IFRS Interpretations Committee in July 2011 for aterm of 3 years. Charlotte is a Managing Director at Goldman SachsInternational where she manages the Accounting Policy Team for Europe, theMiddle East and Africa. She is also a member of the Client Accounting ReviewTeam. Charlotte joined Goldman Sachs in 2004; prior to joining the firm,Charlotte worked at Nomura International for three years and Swiss Re Life &

Health for four years. She qualified as a chartered accountant while working forCoopers & Lybrand in London and in Moscow. Charlotte currently chairs the

Accounting Committee for AFME (the Association for Financial Markets in Europe).


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Dr Martin SchloemerAcco unt ing Principles and Pol ic iesBayer AGGermany

Was appointed to the IFRS Interpretations Committee in May 2013 for aterm of three years.Is Head of Accounting Principles and Policies at Bayer

AG. In this central governance function he is responsible for a uniformapplication of relevant accounting rules across all subgroups. Before this heserved as a consultant on implementation projects for new ERP

components. Dr Schloemer started his professional career with a Traineeship at Deutsche Bank AG. He studied business administration at the RWTH Aachen University and the UniversityCollege in Dublin. Furthermore he spends 4 years as assistant professor teaching external andinternal accounting at RWTH Aachen University. In parallel of his academic duties he worked onselected projects in investment banking. Dr Schloemer is member of several national andinternational Committees, among these are the Accounting Standards Committee of Germanyand the Sounding Board of Business Europe

Rob ert UhlPartner,Deloitte & Tou che LLPUnited States

Bob Uhl is a partner at Deloitte & Touche LLP and National Director of Accounting Standards and Communications. Bob is also the U.S. leader onDeloitte’s Global IFRS Leadership Team. His responsibilities include formulatingpolicies on accounting matters under both US and international accountingstandards, and communicating with accounting standard setters, Deloitteprofessionals, clients and other parties interested in financial reporting.Bob iscurrently a member of the Financial Accounting Standard Board’s Emergi ngIssues Task Force. He also has been active in standard setting includingparticipation in FASB, AICPA, and IASB working groups and other standard

setting forums. Bob is a frequent presenter on U.S. and international accounting topics atconferences and on webcasts.From 1997 to 1999, Bob was a Professional Accounting Fellow inthe Office of the Chief Accountant of the Securities and Exchange Commission. In addition,previously he has been a Managing Director at Goldman Sachs & Co., and held roles inDeloi tte’s Accounting Consultation Group and Stamford, Connecticut audit practice.Bob is agraduate from the University at Albany.


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And rew WatchmanExecuti ve Director of International Financi al ReportingGrant Thorn tonUni ted Kingdom

Was appointed to the IFRS Interpretations Committee in May 2013 for aterm of three years. Andrew is the global IFRS leader for Grant ThorntonInternational and heads its London- based IFRS team. Andrew’s team promoteshigh quality, consistent application of IFRS throughout the Grant Thorntonnetwork, including a consultation service that addresses technical questionsfrom around the world. Andrew has authored or overseen numerous external

and internal publications on the practical application of IFRSs, leads Grant Thornt on’s globalIFRS training programme and chairs two international working groups of member firm IFRSexperts. Andrew and his team also lead the development of Grant Thornton’s responses toIASB proposals. Prior to joining Grant Thornton in 2005, Andrew spent two years as

Accountancy Adviser to the UK’s Department of Trade and Industry (DTI), and fourteen yearswith Arthur Andersen up to partner level. The DTI role involved providing expert advice on public

policy in financial reporting and on all aspects of the transition to IFRSs in the UK.

Summary: To summarize the development of an IFRS is a tedious and time consuming job.The IFRS committee is a diverse set of people who are appointed because of their backgroundand technical expertise in economy and accounting. The development process consist of 6critical stages that help regulate new IFRS agendas. With the help of the interpretationcommittee these new agendas turn into new IFRS for the greater good of accounting standards

around the world.

Documents

Summary of IFRS