Review

A review of the pragmatic utility of the adoption of International Financial Reporting Standards (IFRS)

*¹Owolabi Sunday Ajao, ²Onwere Lucky Chidibebre and ³Dada Samuel O.

¹Associate Professor of Accounting, Department of Accounting, Babcock University, Nigeria
²Senior Accountant, Bursary Department, Babcock University, Nigeria
³Senior Lecturer, Accounting Department, Babcock University, Nigeria

*Corresponding Author E-mail: emilagba05@yahoo.com; Tel: 23480340970

Accepted August 12, 2013

Abstract

The world has become a global village, many nations all over the world engage in various types of international trades which include but not limited to exchange of goods and services, manpower, heavy duty plants and machineries, intellectual materials, foreign exchange transactions, foreign direct investment (FDI), trade finance, loan deals, information communication technology (ICT) and political affiliation. In view of this international network of activities, the International Financial Reporting Standards (IFRS) came on board to make international comparisons as easy as possible. This is however difficult because to a large extent, each country has its own set of rules. For example, US GAAP are different from Canadian GAAP. Synchronizing accounting standards across the globe is an on-going process in the international accounting community (Investopedia, 2013). The aim of this study is therefore to examine the fundamental issues involved in the application of IFRS. Methodology adopted in this study is of theoretical approach of secondary data sourcing which include review of authoritative texts, journals, publications and interviews. The findings of the study show that the issues in IFRS are highly technical and would require great skill and man-power development to understand and implement. The study therefore recommends comprehensive skill acquisition or consulting as an integral step in the process of IFRS implementation. An ideal area for further study is the various stages involved the entire process cycle for full implementation of IFRS.

Keywords: Financial Reporting, International Accounting Standards, Financial Statement, Investors Company.