Frequently Asked Questions on IFRS

Foreword

The development of IFRS is like an old friend to some of us. My own interest goes back to working for a New York investment bank, trying to consolidate results from our Italian, Spanish and other subsidiaries into the UK holding company accounts that were then to be explained, channelled and translated into results fit for our US parent to use.

As to the potential adoption of IFRS by the US, it is with some sadness that I write this in the week that SEC spokesman John Nestor has announced that ‘the report [on IFRS] is nearing completion but staff have not established a timetable for completing a recommendation’.¹

Notwithstanding, on a more optimistic note, more than 100 countries now use IFRS, including two-thirds of the Group of 20. I quote Sir David Tweedie: ‘the gain to international investors, regulators and multinational companies of all speaking the same financial reporting language significantly outweighs the loss of national standards’.²

An exciting initiative has been the IFRS for SMEs, with scope for applicability to small and medium-sized enterprises, estimated as per the IFRS Foundation to account for nearly 95% of companies worldwide.³

As to the need for this book, following Sir David's letter as quoted above, there followed a series of letters in the Financial Times – one reader even offering a prize – to anyone who could offer an explanation of certain terminology.

So for those of us using IFRS in Australia, Brazil, China or Dubai, to name but a few, read ...