Influence of Ifrs

In general, the International Financial Reporting Standards (IFRS) is the most widely used and adopted accounting standard by the companies throughout the world. In this part, we will demonstrate the influences of IFRS at national and company level. To be specific, we will compare the extent whether the published information of our selected companies reflecting IRFS. The companies selected to be analyzed are Abbott in the United States, AstraZeneca in the United Kingdom, Boehringer Ingelheim in the Germany, Shanghai Pharma in the China, Somitomo Dainippon in the Japan, and SGG in Thailand. In Table 1, we illustrate some impacts of IFRS on financial statements according to Goodwin and Ahmed (2006).

Impacts on Financial Reporting
IAS 12
Income taxes
Share-based Payment
IAS 36
Impairment of Assets
IAS 38
Intangible Assets
IAS 19
Employee Benefits
IAS 39
Financial Instruments: Recognition and Measurement
IAS 18

IAS 16
Property Plant and Equipment
Cash Flow Statements
Table 1 impacts of IFRS on the financial statements (Source: Goodwin, J., and Ahmed, K. (2006). Managerial Auditing Journal)

By applying the IFRS, it is possible that we can the financial reporting of the firms in the world transparent and comparable. There are some similarities and differences in the impact of IFRS among six countries. China is permitted to adopting the IFRS, but it is allowed to make some changes based on the IFRS. China adopted this accounting standard in 2007, but several changes are made. To illustrate, in China, the impairments must never be reversed, which is inconsistent with IAS 36. The general impact of IFRS on Chinese companies is to make the reported earnings more information and useful for investors. However, the efficiency of the information mainly depends on whether the companies have the incentives to deliver the correct information (Welch and Schizas, 2013). In 2014, Shanghai Parma still prepared their financial...