International and Sri Lankan financial reporting standards and International accounting standards

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 International and Sri Lankan financial reporting standards and International accounting standards



  • International financial reporting standards and International accounting standards
The International Accounting Standards Board (IASB) created the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) as comprehensive frameworks to harmonize financial reporting methods across national boundaries. IFRS, which combines IAS with more recent standards published by the IASB, was inspired by International Accounting Standards (IAS), which were created by the International Accounting Standards Committee (IASC). The purpose of these standards is to improve financial reporting's transparency, comparability, and reliability by offering principles-based criteria for financial information's recognition, measurement, presentation, and disclosure. With an emphasis on the content of transactions rather than their formal structure, IFRS and IAS provide flexibility and judgment in their implementation, taking into account various business practices and regional economic circumstances. The broad acceptance of IFRS and IAS has unified global accounting procedures, enabling cross-border transactions and enhancing the quality and comparability of financial reporting globally, while implementation differs by nation(International Financial Reporting Standards (IFRS) and IFRIC Interpretations. 2024).

  • Sri Lanka financial reporting standards and Sri Lanka accounting standards

The fundamental frameworks that direct financial reporting practices in Sri Lanka are the Sri Lanka Financial Reporting Standards (SLFRS) and the Sri Lanka Accounting Standards (SLAS). The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) has released SLFRS, which are intended to promote openness, comparability, and dependability in financial reporting by bringing Sri Lanka's accounting standards into line with global best practices. In contrast, SLAS, developed by the Sri Lanka Accounting Standards Committee, were substantially converged with International Financial Reporting Standards (IFRS) in 2012 to become SLFRS, demonstrating a strategy change towards aligning Sri Lanka's accounting procedures with global standards(Accounting Standards. 2024).

These standards provide thorough guidance on all aspects of financial reporting, such as financial information recognition, measurement, presentation, and disclosure. SLFRS and SLAS provide comprehensive frameworks to guarantee that financial statements correctly reflect the economic content of transactions, ranging from revenue recognition to lease accounting, financial instruments to business combinations. Companies may improve the quality and applicability of their financial data by following these guidelines, which will help stakeholders make better decisions(Salgado 2024).

In Sri Lanka, financial institutions, listed businesses, and other designated organizations are required to implement SLFRS. Other organizations may choose to voluntarily switch to SLFRS, nevertheless, in order to increase the reliability and comparability of their financial statements. The extensive implementation of SLFRS fosters investor confidence, streamlines international trade, and improves the general caliber of financial reporting in Sri Lanka. Furthermore, SLFRS is constantly updated and revised to reflect the dynamic nature of accounting practices and to guarantee that Sri Lanka's accounting standards are current and adaptable to changing global trends as well as changing corporate demands. Companies in Sri Lanka may show their dedication to openness, responsibility, and good corporate governance by keeping up with these developments and adjusting their financial reporting procedures to SLFRS. This would support the nation's economic development and stability(Salgado 2024).

References

International Financial Reporting Standards (IFRS) and IFRIC Interpretations. 2024. Available at: https://www.iasplus.com/en/standards/standards [Accessed: 12 February 2024].

Accounting Standards. 2024. Available at: http://www.slaasc.lk/accounting/ACS_2017.php [Accessed: 12 February 2024].

Salgado, N. 2024. Sri Lanka Accounting & Auditing Standards. Available at: https://www.casrilanka.com/casl/index.php?option=com_content&id=1186 [Accessed: 12 February 2024].

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