B. Com, M. Com, Chartered Accountant or accounting professional there is this one course which has practical application in all accounting jobs and that course is Diploma in IFRS. IFRS stands for International Financial Reporting Standards. The IFRS course by ACCA is specially designed by finance and accounting professionals.
A diploma in International Financial Reporting (IFRS) is a well-reputed qualification created by leading accounting organizations. This diploma aims to develop knowledge in the field of financial reporting. This program is suitable for professionals who are in the field of accounting, finance and audit. Such a diploma will enhance the practical and theoretical aspects of IFRS.
All You Need to Know About Diploma in IFRS
Overview of Diploma in IFRS
These are accounting standards which decide the reporting of particular types of transactions and events. These protocols are developed by International Accounting Standards Board (IASB). IASB aims to standardize the financial statement and other terminologies so that investors and other professionals can compare the financial performance with their international peers. European Union, which includes 100 countries, uses IFRS and is also accepted by two-thirds of the G20.
What is IFRS?
IFRS are set of accounting rules for financial statements. Rules that companies can follow while writing consistent and transparent accounting statements.
They are issued by the London-based Accounting Standards Board (IASB) and address record keeping, account reporting, and other aspects of financial reporting.
IFRS Standards are required in more than 140 jurisdictions and permitted in many parts of the world, including South Korea, Brazil, the European Union, India, Hong Kong, Australia, Malaysia, Pakistan, GCC countries, Russia, Chile, Philippines, Kenya, South Africa, Singapore, Israel and Turkey.
As of today, 144 jurisdictions have already fully adopted the International Financial Reporting Standards (IFRS).
Why IFRS standards are important?
Today, cross-border transactions have become common, as many businesses are looking for worldwide opportunities. Earlier, such internationalism was obstructed by different accounting standards, complexity and risk associated with business deals. IFRS has addressed all such issues by bringing all the financial aspects to the same page. It is done by introducing globally accepted accounting standards.
GAAP vs IFRS
There are different financial reporting standards across various countries. United States has grouped these standards under GAAP (generally accepted accounting principles). Although in over 100 European countries IFRS framework is accepted and followed. So, what is the difference between GAAP and IFRS? The primary difference is in the methodology. GAAP is based on rules, while IFRS is based on principles. For US businesses, GAAP still holds its prominence. However, there is a possibility that in future, US Securities and Exchange Commission (SEC) will adopt IFRS.
IFRS Origin
Implemented by the European Union, this standard aims to make accounting easily accessible across the globe by creating a common accounting language. Today IFRS has a global reach and is now playing a pivotal role in synchronizing the accounting standards. Since 2001, this IFRS standard has been managed by the IFRS Foundation and is working actively to replace International Accounting Standards (IAS).
Principles of IFRS
IFRS follows 4 important principles while preparing financial statements. These principles are clarity, relevance, reliability and comparability.
Clarity
It is expected from the financial domain to be easy to understand for everyone. IFRS guidelines decide which information has to be included and presented in the financial statements. IFRS aims to provide accurate and fair results.
Relevance
IFRS strives to remain relevant to the changing world. These standards find a way to help investors better understand the financial impact which may not be captured in the financial statements.
Reliability
Here, reliability represents accuracy. Any misstatements or omissions in financial statements will minimize their reliability.
Comparability
It implies that businesses should be able to compare their financial reports with the previous year’s reports or even with the reports of other entities in the same industry.
Importance of IFRS
IFRS is an international accounting standard and holds value for many countries and the world economy. Below are some of the importance:
Transparency
It promotes accountability and transparency in financial statements made by companies, government agencies and small firms. It reduces margin error, manipulation and fund irregularities. Also, such a standard encourages clarity or work with consistency.
Uniformity and Comprehensive
IFRS has brought uniformity in understandability and presentation of statements. When every businessperson follows the same standard, it becomes easy for companies to follow a common law to compare their growth.
Security and flow
Such standards keep track of transactions, record funds information and provide the desired level of security for all indirect and direct foreign investments. Such a standard is crucial when an individual is dealing with heavy transactions or assets.
Accountability
These standards maintain accountability by giving strength to financial reporting. If these standards are not followed, companies will face penalties.
Also read: Career in ACCA certification Before B. Com/Graduation
Why it is important to study IFRS for Indian Students?
On global platform if companies follow same set of standards to write their financial statement it would become easy to
- Analyses and compare the performance of organization on global platform
- It would be easier for investors to study financials of organization
- Raising finance also becomes easy on global platform
In short, a global comparison is possible with consistent set of accounting standards.
That is why commerce students or accounting professionals who are willing to work for corporates and multinationals should upgrade themselves with the knowledge of IFRS.
India has also accepted IFRS standards. Indian companies with net worth of equal to or more than 500 crores have to switched to IFRS and smaller companies will have to follow IFRS to be on same page with bigger companies they are dealing with.
So the study of IFRS becomes INEVITABLE for Indian students to get the best accounting and finance job opportunities.
Also read: What are the ACCA job opportunities and salaries across the world?
Conclusion
So, are you planning to do a diploma in IFRS? Don’t think twice about this. This diploma is accepted in all European countries, and even in India, most of the reputed MNCs hire candidates with IFRS diplomas. So, if your dream is to do higher studies in a European country in finance, then IFRS is waiting for you.