The International Accounting Standards Board decided not to extend the relief from restatement of comparative figures currently provided by IFRS 9, which allows an entity not to restate comparative figures if it decides to adopt the standard before 2012.The International Accounting Standards Board has proposed in its Exposure Draft Mandatory Effective Date of IFRS 9 to move the mandatory effective date of IFRS Financial Instruments to annual periods beginning on or after 1 January 2015.
Earlier application would continue to be permitted. The ED does not address other specific transition issues for IFRS 9, including the prohibition against applying IFRS 9 to items that have already been de-recognized at the date of initial application, which the IASB had indicated it may reconsider. The ED does not discuss how the effective date of IFRS 9 should relate to the effective dates of other projects but confirms the importance of the timing of the insurance project (IFRS 4 Phase II) when setting an effective date.
The ED poses questions for public comment on the proposed date of 1 January 2015 and the IASB’s tentative decision not to change the current requirement in IFRS 9 on comparative figures. The comment period of the exposure draft closes on 21 October 2011.
The IASB has published an ED proposing to defer the mandatory effective date of IFRS 9 to annual periods beginning on or after 1January 2015, with earlier application permitted. The comment period of the ED closes on 21 October 2011. The IASB recently extended its time line for IFRS 4 Phase II and has not yet set a publication date for the insurance standard.
The IASB recently extended its IFRS 4 Phase II timetable and now plans to make a decision on whether to re-expose or move to a review draft of the standard by the end of 2011, or during the course of 2012. It will set a publication date for a final IFRS 4 Phase II standard in due course. The deliberations on the insurance project are ongoing and the IASB has not yet made a decision on the effective date for the future IFRS 4 Phase II standard.
Extension of relief from the requirement to restate comparative figures until the mandatory effective date of IFRS A single effective date for all the phases of IFRS 9, as well as the revised IFRSs on insurance contracts, revenue recognition, and leasing. Many insurers asked the IASB to delay IFRS 9 to achieve alignment with IFRS 4 Phase II.
First of all, the delay of the IFRS 9 effective date gives insurers more time to prepare for IFRS 9. Additionally, allowing insurers sufficient time to make the necessary system changes and to prepare adequately for transition. Considering that the IASB does not expect to issue an IFRS 4 Phase II standard in 2011, it would be impossible to fully align both standards for adoption under the effective date currently in IFRS 9 (1 January 2013)
Various types of accounting systems are in existence and they help maintain business records. Primarily the goal of a business is to maximize profitability and minimize expenses. Towards this end, every business organization expand will the business and increase its sales while reducing operating expenses. Accurately tracking the progress of this exercise and maintaining meticulous records is served through accounting systems.
Initially, the purpose of accounting was to simply track business activity and maintain up-to-date profit & loss details periodically or on a given day. Today, accounting systems also involves requirements of tax authorities, investors, government regulations and the management. In this complex scenario selecting the right accounting system is crucial.
The double entry system has gone through much refinement over the years. Double entry system is the only method that fulfils all the essential objectives of a systematic accounting process. It takes care of the two fold aspect of each business transaction.
The single entry system ignores the two-fold aspect of transactions as compared to the double entry system. In the single entry system, the personal aspects of transactions, in other words the personal accounts, alone are recorded. The method simply ignores the impersonal aspects of a transaction excluding the cash. It does not have any safeguards regarding the accuracy of posting and is not at all safe from fraudulent practices because it lacks safety measures necessary in recording cash transactions and therefore, considered imperfect.
The age old question of terming accounting as an art or science rises even today. Accounting documents, in no way, establish a cause and effect relationship. The fact is, it only provides a procedure when strictly followed help accomplish the objectives of accounting. In which case, accounting is art, and not science. And, the art of bookkeeping is as old as the art of trading and commerce itself.