International Financial Reporting Standards

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School
Grand Canyon University **We aren't endorsed by this school
Course
ACCOUNTING ACC 502
Subject
Accounting
Date
Oct 19, 2023
Pages
1
Uploaded by BaronRam11392 on coursehero.com
First, lets define IFRS; IFRS is known as International Financial Reporting Standards, which has standards to make companies transparent, consistent, and comparable. IFRS says fair value, is an amount an asset can be exchanged or the liability settled among a group as they are in arm's length and knowledgeable of the asset (Young et al., 2018). A great example of this is basically selling your car; you do not want to take advantage of someone who wants to buy it but doesn't know the background of the car or accidents etc. Both parties need to have knowledge of the asset for it to be a fair value. Along with using the IFRS, there will need to be frequent updates on the balance sheet; it also values the long-term assets on balance sheets because when there are losses, it does not affect the balance sheet, but rather the income statement. (Young et al., 2018). When speaking about purchasing, the fair value is recorded on the date of when the purchaser has control (Young et al., 2018). When acquiring a company, there may be a run in with negative goodwill which is buying a company for a bargain; the IFRS states, when you reassess the purchase and negative goodwill is there, you may show it as profit on income statements but you will not see this negative goodwill on your balance sheet. Young, S. D., Cohen, J., & Bens, D. A. (2018). Corporate financial reporting and analysis (4th ed.). Wiley.
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