Advances in Economics, Management and Political Sciences
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Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 47 , 01 December 2023
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The Evolution of Generally Accepted Accounting Principles: A Focused Look into the International Financial Reporting Standards
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Abstract
Financial reporting has long been an essential lens through which shareholders assess the management’s operation of companies and through which external users such as potential investors evaluate how companies are structured and perform financially for economic decision-making. For this reason, the truth and fairness of financial statements is emphasized in financial accounting to reflect the economic substance over the legal form. As cross-border trades and investments grew by leaps and bounds after the World War II, a call for a globally uniform and consistent set of accounting standards thrived in full swing. Hence, the genesis of IAS and subsequently IFRS for better quality, comparability, understandability, and transparency of financial statements. Over recent years, the trend in accounting harmonization with gradual convergence between IFRS and US GAAP has also become prominent. However, accounting standards are never perfect in presenting economic reality upon their inception. Blatant financial scandals play an indispensable role in shaping accounting standards for improvements. This paper takes a focused look into IFRS to examine how the generally accepted accounting principles evolve in reaction to scandals and loopholes criticized, with a detailed analysis of the standards for leases and revenue recognition. A generic discussion on the difference and convergence between IFRS and US GAAP concludes this paper.
Keywords
International Financial Reporting Standards (IFRS), leases, revenue recognition, accounting harmonization
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-141-4
- ISBN (Online)
- 978-1-83558-142-1
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/47/20230388
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited