IFRS is a fairly complex and cumbersome accounting system, and will require a lot of training & professional support for implementation. It will be both costly & disrupting, so the country needs to be adequately prepared for adopting it.
the effective application of IFRS requires the existence of a solid accounting infrastructure with corporate governance and financial reporting practices already in place, whereas this is not always the case in most of the African countries
Each country has its own GAAP. Local GAAPs might be quite different than IFRS causing a totally different set of financials. In order to make a proper transition. Each IFRS and IAS should be handled and compared to its local counterpart and differences must be eliminated. Unless local GAAP is fully complied with IFRS you will have two different sets of financial statements one for the local purposes one for the international.
The country will face several situations, the following should be highlighted: 1. Regulations must be widely communicated and published 2. The costs of implementing 3 must be budgeted. Both accounting professionals and companies must prepare in advance 4. A timeline for implementation should be set
Poudel, G., Hellmann, A. & Perera, H. (2014) The adoption of International Financial Reporting Standards in a non-colonised developing country: The case of Nepal. Advances in Accounting, incorporating Advances in International Accounting, 30(1)
The challenges countries may face in IFRS adoption is inexhaustible. They strongly depend on a country socioeconomic, political and regulatory environment. Most challenges are likely to occur in developing countries who are unlikely to keep pace with changes in IFRS requirements.
i try to find idea for my msc thesis on this regard. any one who have advise me i don"t even identify the title to be used but i think the current problem in Ethiopia is the adoption of IFRS .so i want to dig out the problem in this area but i confused.
Most of the challenges emanate from the lack of participation in the crafting of the IFRS to bring in a sense of ownership thereby permitting smooth adoption. Participation is very key through national or regional bodies as it iron out issues to do with national differences and efforts towards harmonization. You can try to sniff around areas to do with the participation, benefits and level of IFRS adoption in your country.
The year 2005 was a pivotal year for all companies listed on the Athens Stock Exchange (ASE) due to the mandatory application of International Financial Reporting Standards (IFRS).. Using a sample of ninety-five (95) firms from the commerce and industry sector and fifteen (15) representative financial ratios, we analysed and assessed the impact of IFRS adoption three years before (2002-2004) and three years after (2005-2007) their mandatory application. Findings suggest that IFRS adoption had a significant impact on return on equity and return on capital employed, net profit margin, debt to equity ratio and interest coverage ratio.
when we talk about IFRS adoption the first think that we should consider is the professional judgments because the application of the IFRS is based on the exercise of accountants' professional judgments