Dialogue with standard setters

2019 ◽  
pp. 141-150
Author(s):  
Stefano Bianchi
Keyword(s):  
Financial Institutions ◽  
Financial Statements ◽  
Financial Information ◽  
Legal Form ◽  
Accounting Standard ◽  
Effect Analysis ◽  
Financial Leasing ◽  
Operating Leases ◽  
Annual Reporting ◽  
Lease Accounting

The new accounting standard IFRS 16 Leases is the result of a long process of review of the criteria for recognizing and evaluating the lease on the financial statements. The need to promote a revision of the accounting criteria on leasing has been felt by many players of the financial system. IASB, FASB, EFRAG, financial institutions, auditors and preparers have supported a debate on leasing over the years, which has underlined the im-portance of representing and assessing the operating leases in the financial statements with criteria similar to the criteria utilised for the financial leasing in order to improve the quality and comparability of the financial information. The new standard IFRS 16 Leases will be effective for annual reporting periods begin-ning on or after 1 January 2019 and it will bring significant changes in accounting require-ments for lease accounting, primarily for lessees, replacing the existing suite of standards and interpretations on leases as per follows: - IAS 17 Leases (IAS 17) - IFRIC 4 Determining whether an Arrangement contains a Lease (IFRIC 4) - SIC 15 Operating Leases - Incentives (SIC 15) - SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease (SIC 27). The purpose of the following review is to analyse some of the main issues arising from the adoption of IFRS 16 Leases supported by the results of a recent effect analysis.

scholarly journals Convergence On A Global Accounting Standard For Leases Impacts Of The FASB/IASB Project On Lessee Financial Statements

2011 ◽  
Vol 10 (10) ◽  
pp. 55 ◽  
Author(s):  
Bob G. Kilpatrick ◽  
Nancy L. Wilburn
Keyword(s):  
Financial Statements ◽  
Fortune 500 ◽  
Financial Statement ◽  
Matched Pairs ◽  
Accounting Standard ◽  
Fortune 500 Companies ◽  
Operating Leases ◽  
Accounting Rules ◽  
A Company ◽  
Lease Accounting

In this paper, we compare the current U.S. GAAP and IFRS lease accounting rules with the proposed rules under the joint FASB/IASB projects exposure draft as modified by their redeliberation decisions. Additionally, we discuss the potential financial statement impacts of the proposed changes and provide examples of the effects of constructive capitalization of operating leases on the financial statements and resulting ratios for matched pairs of Global Fortune 500 companies in industries, with each pair consisting of a company that follows U.S. GAAP versus one that follows IFRS.

scholarly journals Special issues of IFRS application in Russian organizations

2020 ◽  
Vol 164 ◽  
pp. 09029
Author(s):  
Tatiana Melekhina ◽  
Elena Sedova ◽  
Irina Karpova
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
International Standards ◽  
Financial Reporting Standards ◽  
Russian Economy ◽  
Operating Leases ◽  
The Right ◽  
Double Entry ◽  
Lease Accounting ◽  
Coefficient Method

In modern conditions, Russian accounting is increasingly oriented to international standards. Accounting for leasing relations is also subject to changes that are associated with the transition of Russian accounting to international financial reporting standards (IFRS). In 2016, a new standard was approved for accounting for leases in public sector organizations - the SPS “Leases” (entered into force on January 1, 2018). For other organizations, on October 16, 2018, FAS 25 “Lease accounting” was approved. This standard introduces the type of asset - the right to lease, which represents a new format for accounting methodological documents. The purpose of the study is to consider the features of the application of FAS 25 “Lease accounting” based on the new IFRS 16 “Leases” in accounting for operating leases of Russian organizations. The authors consider the lease relations of economic entities of the Russian economy using the example of pharmacy organizations, in particular, the main aspects of FAS 25, the procedure for accounting for operating leases from the perspective of a lessee and lessor, features of accounting for sublease, leaseback, lease on special terms, as well as disclosure of lease information in accounting (financial) statements. The methodological basis of the study consisted of elements of the accounting method (system of accounts, double entry book-keeping, reporting) and tools of economic analysis (method of comparison, absolute and relative values, tabular and graphical representations of data, coefficient method). As a result of the study, an operating lease accounting mechanism was proposed, which reflects the specifics of pharmacy organizations.

scholarly journals Formation of Financial Statements at Islamic Financial Institutions

2018 ◽  
pp. 128-132
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Financial Institution ◽  
Financial Statements ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Charitable Foundations ◽  
Islamic Financial Institutions ◽  
Further Development ◽  
Traditional Economy

Conceptually, the key approaches to the formation of financial reporting for an Islamic financial institution (IFI) have much in common with approaches developed for economic entities in the traditional economy. At the same time, the AAOIFI Concept and the Financial Accounting Standard No. (1) provide for Islamic financial institution-specific provisions and reporting forms that reflect the requirements of the Sharia. Disclosure of methods in published accounts is intended to help its users distinguish between changes in the financial position of an Islamic financial institution, the results of its operations, cash flow, limited investment managed by it, the sources and use of Zakat (poor-due) and Kard funds and charitable foundations. Further development of the regulation of the issues on the formation of financial statements seems to us in the making common approaches to its formation closer for companies operating in the traditional economy and Islamic financial institutions.

scholarly journals Implementation of SAK EMKM in CV Adro Textile through an Action Research Approach as a Form Financial Management Accountability

2019 ◽  
Vol 3 (2) ◽  
pp. 66
Author(s):  
Ali Farhan ◽  
Resha Dwi A. P. Mulyono
Keyword(s):  
Action Research ◽  
Financial Management ◽  
Financial Statements ◽  
Financial Information ◽  
Financial Accounting ◽  
Research Approach ◽  
Accounting Standard ◽  
Lack Of Information ◽  
Action Research Approach ◽  
Research Procedure

Most of micro business industries have a problem on accountabilty and lack of information on financial and management knowledges. CV Adro Textile is one of the micro business which faced those problems. This research aims to introduce an accounting policy and standard into action research methodolgy for a micro business such as CV Adro Textile. CV Adro textile is a manufacturing company that engaged in the garment sector. During its business, CV Adro Textile faced some problems regarding to the financial information. CV Adro Textile cannot ensure the profit that been generated, the cash turnover, and the production cost as well as the financial information for the taxation need. Through the action research, this research tried to implement the EMKM financial accounting standard to fulfill CV Adro Textile’s needs to the accountable financial statements.  Action research is a research procedure aims to implement a new policy based on needs and problems of the research object. The results of this research were an accounting recording system for CV Adro Textile based on SAK EMKM and an evaluation of the SAK EMKM application that apparently could not accommodate the whole recording needs and information of an industry. This paper contribute to the way of intorducing an accounting standart into a micro entity

scholarly journals Implementasi Maqashid Syariah dalam Merumuskan Tujuan Laporan Keuangan Bank Syariah

2020 ◽  
Vol 3 (2) ◽  
pp. 177
Author(s):  
Muzayyidatul Habibah
Keyword(s):  
Financial Institutions ◽  
Research Method ◽  
Field Research ◽  
Financial Statements ◽  
Qualitative Approach ◽  
Financial Information ◽  
Tertiary Level ◽  
Property Development ◽  
Financial Reports ◽  
Additional Information

<p class="bdabstract">This research aims to analyze how the implementation of maqashid as-sharia in formulating Islamic bank financial statements’ objectives. The research method used is a descriptive qualitative approach, through field research, by examining published Islamic financial reports and conducting interviews with management. The purpose of preparing Islamic financial reports on Islamic entities following the maqashid as-sharia is to fulfil the objectives in providing useful information to stakeholders comprehensively. The purpose of Islamic financial reports includes three levels, namely primary (dharuriyat), secondary (tahsiniyah), and tertiary (hajiyat). The primary aspect is very useful in providing financial information that all financial institutions' activities come from halal sources. Meanwhile, the second aspect can provide additional information on adherence to sharia principles, as a form of protection for property development through contracts under sharia principles. In the aspect of fulfilling the tertiary level, it shows the urgency in presenting assets owned by sharia entities in a transparent and accountable manner, as an effort to be accountable to humans and Allah SWT., Thus providing benefits to more people. Fulfillment of these three aspects of maqashid sharia is a form of benefit in the management of sharia entities.</p>

The need for Islamic accounting standards: the Malaysian Islamic financial institutions experience

2019 ◽  
Vol 10 (1) ◽  
pp. 115-133 ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Fadzlina Mohd Fahmi ◽  
Asyaari Elmiza Ahmad
Keyword(s):  
Financial Institutions ◽  
Accounting Standards ◽  
Financial Statements ◽  
Advisory Council ◽  
Main Concern ◽  
Structured Interviews ◽  
Accounting Standard ◽  
Content Type ◽  
Body Of Knowledge ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to examine views of financial statements preparers with regard to the practices in reporting Islamic Financial Institutions (IFIs), thereby contributing to answer whether there is indeed a need for a separate set of Islamic accounting standards for IFIs. Design/methodology/approach Drawing upon seven in-depth semi-structured interviews conducted with IFIs’ leading officers who are highly involved in preparing financial statements in Malaysia, the paper offers evidence on the current stance of reporting the operation of IFIs, the influence of AAOIFI accounting standards and the feasible application of IFRSs in reporting IFIs. Findings While it is shown that most of the interviewees admit the feasibility of IFRSs in reporting IFIs, many interviewees placed greater emphasis on the spirit of Islam based on Islamic contract. In that case, the findings show that to convince the public that they offer Shariah compliance products approved by Shariah Advisory Council, there is a need for specificity guidelines or standards for IFIs within the IFRS framework. The main concern raised in the paper is that separate Islamic accounting standard is not needed, instead the option needs to be within the IFRS framework with the collaboration work of Accounting and Auditing for Islamic Financial Institutions (AAOIFI) and the International Accounting Standard Board (IASB). Originality/value With the recent rapid growth of IFIs, this paper contributes regarding the inconclusive stance on the need for specificity accounting standards for IFIs such as the ones issued by AAOIFI. It adds to the current body of knowledge by highlighting the collaboration of the AAOIFI and the IASB for the intended specific guidelines for IFIs to be accepted globally.

scholarly journals Quality of non-financial information reported by financial institutions. The example of Poland and Greece

2017 ◽  
Vol 22 (6) ◽  
pp. 5-16 ◽  
Author(s):  
Marzanna Lament
Keyword(s):  
Corporate Social Responsibility ◽  
Financial Market ◽  
Financial Institutions ◽  
Financial Statements ◽  
Financial Information ◽  
Reporting Standards ◽  
Reporting Practices ◽  
Csr Reporting ◽  
Corporate Social

This paper aims is to analyse and verify the applicable principles of Corporate Social Responsibility (CSR) reporting in light of the regulations of Directive 2014/95/EU, as well as to evaluate quality of non-financial information presented in CSR reports of financial institutions in the Polish and in the Greek market. Two research hypotheses have been postulated in connection with this aim: (H1) – The Directive 2014/95/EU contains regulations that will contribute to improved comparability and usefulness of information presented in financial statements. (H2) – financial institutions in the Polish and in the Greek market draft their CSR reports in different ways, which obstructs their comparability. In order to verify hypothesis (H1), regulations of the Directive 2014/95/EU and specialist literature have been reviewed. In order to verify hypothesis (H2), the author has conducted research into a group of financial institutions in the Polish and in the Greek financial market by examining and analysing CSR reports compiled in 2010–2015 with regard to quality of the information, in particular, its usefulness and comparability. This assessment involved reviewing of: principles of publication and verification of the reports, frequency of their drafting, volume, scope and structure. It must be concluded neither the existing regulations nor the reporting practices ensure the qualitative features in question. As a consequence, CSR reports are incomparable and unclear. Introduction of sectoral reporting standards in future should be considered, as it would help to improve clarity and comparability of the reports.

Effects of Financial Innovations on Profitability for Deposit Taking Microfinancing Institutions in Kenya

2018 ◽  
Vol 9 (6) ◽  
pp. 529-536
Author(s):  
Martin Khoya Odipo ◽  
Keyword(s):  
Financial Institutions ◽  
Positive Relationship ◽  
Financial Institution ◽  
Secondary Data ◽  
Financial Statements ◽  
Descriptive Statistics ◽  
Primary Data ◽  
Microfinance Institutions ◽  
Financial Innovations ◽  
Strong Positive Relationship

Recent studies have documented that innovations improve profitability of firms. This article documents that deposit taking micro financial institutions that have adopted financial innovations have increased their profitability. The study covered five years between 2009-2013. Both primary and secondary data were used in the study. Primary data was obtained through administration of drop and pick questionnaires to selected employees of the institutions. Secondary data was obtained from financial statements and management reports of these deposit taking microfinance institutions. Data was analyzed using descriptive statistics, return on asset and multi-liner regression model to determine the effect of each financial innovation applied on profitability on the micro-financial institution. The results showed that most deposit taking microfinance institutions adopted these financial innovations in their current operations. There was strong positive relationship between individual innovations and profitability. In line with profitability ROA also showed improvement each year after the adoption of these financial innovations.

Particularities of the independent auditor's report on reliability of accounting (financial) statements for 2019: COVID-19 as qualitatively essential information (Part 2)

2020 ◽  
Vol 23 (7) ◽  
pp. 777-799
Author(s):  
O.I. Shvyreva ◽  
Z.I. Kruglyak ◽  
A.V. Petukh
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Economic Situation ◽  
Risk Disclosure ◽  
Essential Information ◽  
Logical Method ◽  
Annual Reporting ◽  
The Face ◽  
Key Aspects ◽  
The Impact

Subject. This article discusses the issues related to the practice of financial reporting in the face of uncertainties caused by the coronavirus contagion, as well as the specifics of the audit strategy and formation of an audit opinion on this reporting. Objectives. The article aims to identify the quality characteristics of financial reporting prepared in the context of the COVID-19 pandemic and justify the key aspects of assurance engagement completion in an extremely uncertain epidemiological and economic situation. Methods. For the study, we used an abstract-logical method, content analysis techniques, systematization, and classification. Results. Analyzing the impact of the extremely uncertain epidemiological and economic situation on financial statements, the article clarifies aspects of disclosure of events after the reporting date and threats to business continuity in the annual reporting of economic entities. The article identifies possible alternative procedures and algorithms to obtain proper evidence when it is insufficient in the face of the inability to meet certain audit standards requirements in a remote audit environment. The article defines the impact of COVID-19 risk disclosure on the structure of the audit report and opinion. Relevance. The results of the study can be used in the practical activities of economic entities that prepare financial statements in the face of significant uncertainty, as well as auditors and audit organizations.

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