What Is IFRS And Why Should You Get A Certification?


What Is IFRS And Why Should You Get A Certification?

When it comes to financial reporting, there should be a standard process and way of representing it. This is why IFRS is an important concept making the accounts of any organisation understandable across international boundaries. If you want to know more about IFRS and the advantages of getting a certification in IFRS, read on.

What is IFRS?

IFRS (International Financial Reporting Standards) is a set of international accounting standards which has been established by the IFRS Foundation and International Accounting Standards Board (IASB). The aim is to provide a common global language for the companies to prepare and publish their financial reports so that it is acceptable and recognisable across the world.

Without any international financial reporting standards, it would be difficult to compare financial accounts of organisations from different countries from different parts of the world. You would have, otherwise, had to find out the accounting principles followed in those countries, then find out the differences in the accounting standards. This leads to a tedious task of comparing and adjusting.

IFRS has made it easier to compare organisations from different parts of the world who follow the common accounting standards.

What are the advantages of adopting IFRS?

Apart from providing a common standard of reporting, there are numerous advantages of adopting IFRS. Some of the prominent ones are mentioned below:

Provides better comparability – When businesses are using a similar financial reporting standard, it makes easier for investors to compare the financial statements more accurately. It is highly helpful for investors to understand where to invest when they have a clear picture of the financial comparisons of the organisations.

Benefits new and small investors – As the financial standards are common, the reporting standards are made simple and have better quality. This puts the new and small investors at par with professional investors and is the financial standards are simple to be read by all, they do not face the risk of professionals taking advantage.

Manage resources better – As the accounting standards are streamlined through IFRS, companies can manage their resources better. It can also lower the cost of auditing and statutory reporting.

Lowers the cost of capital – As the financial reports are standardised through IFRS, businesses can raise more capital from foreign markets at a lower rate as it creates a sense of confidence among the investors. It is easy for investors to understand the financial reporting when it complies with the international standards.

What are the benefits of having an IFRS certification?

Having a certification always has its advantages and if you are looking to start a career as a finance manager, an IFRS certification can really help you. Following are some of the reasons why you should get an IFRS certification:

There is a lack of skilled accounting professionals who are well-versed with international standards in the industry. Getting certified and having the skills will place you in a great position to get opportunities to work with some of the top organisations.

As the implementation of IFRS has already started in India, the demand for people who are skilled in it is going to skyrocket in the next few years. You can get attractive salary packages if you have a certification in IFRS.

There is a demand for IFRS professionals across the financial and banking industry. They need skilled professionals who can implement IFRS in their financial reporting. With a certification, you can improve your chances of a promotion or getting a better position.

As an IFRS expert, you can also start a successful career in the financial education industry. You can join as a subject matter expert in institutions offering training in IFRS and this is a lucrative industry.