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Introduction
Accountants all over the world have displayed an agreement in clamoring for uniform accounting standards to promote, evaluation and easy consolidation. Further, uniform accounting standards is also desirable to make accounting a universal language of communication and to deny any scope for manipulation. In earlier seventies accounting practice from around the world joined forces and established a global body whose function is to minimize variations in international accounting reporting practices through the dissemination of international accounting standards. ... The advantage of Harmonization is very clear because it reduce the diversity of accounting reports from one corner to other corner of the world. Harmonization will make the comparison of international reporting easier and less expensive. In Australia, Australian Accounting Standards Board a Public Sector body issues standard that all companies have to follow by virtue of the corporation law. The body (AASB) has completed a substantial process to re-issue some of the standards that are incompatible with International standards, which is “an attempt to ensure that compliance with Australian accounting standards result in compliance with International standards”. [ ]
In Australia the companies will implement International Accounting Standards by 1 January 2005, hence all entities from Ist January 2005, reporting under the corporation act have to apply International accounting standard Boards standards. Therefore we can say that the process is under conversion, hence companies in Australia have to start thinking about how to implement these changes and what measures have to be taken, say for e. ...
The Treatment of goodwill is always been a controversial issue in Australia, The Australian Accounting Standard for the Treatment of Goodwill Is discussed in AASB 1013 which also discuss about the Discount on acquisition that arise from acquisition of a business. In general when the purchase consideration of a business after paying the identifiable assets and liability for that business, which is based on fair value may give accounting difference and if this difference is excess amount of the net asset will give rise to Goodwill. ...
In late 90s ISAC (International Accounting standard revised it standard IAS 22 and issued IAS 38 which deals with treatment of goodwill (more specific intangible assets). This new or revised standard IAS 38 applies to all the Intangible assets but this standard not deals with Financial assets like Ordinary and Preference shares, Debentures, Bills and notes which represent claims for future payment on other economic units. ... [ ] Hence if Australian Companies going to adopt this IAS38 and the time frame is already set will defiantly impact Australian companies’ because the current AASB1013 practice for treatment of goodwill is quite different from IAS38 as the current practices in Australia regarding the identification and measurement of intangible assets, which comprises amortization.
Proposed Structure by 2005
The International Accounting standards committee (IASC) is an independent private sector body, which shaped with the objective to achieve uniformity in accounting principle, which is used, by businesses and other organizations for financial reporting around the world. International Accounting standard have done immense effort to improve, harmonies and encourage convergence in financial reporting standards around the world: The advantage of international harmonization is enormous because of following reasons:
1. The financial report of different companies in different part of the world can easy be compared due to International harmonization. ... Again harmonization removes barriers in international capital flows by removing differences in financial reporting. ...
It can be seen that International standards will be adopted in many parts of the world and Australia is one of the county, which recently decided to adopt International Financial Reporting standards by 2005.
Approximate Word count = 2839
Approximate Pages = 11.4
(250 words per page double spaced)
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