STATEMENT OF FINANCIAL POSITION (BALANCE SHEET), IFRS: ISSUES AND CHALLENGES

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INTRODUCTION

The world today is changing drastically and it is expected that every activity will continue to change with it. Therefore, it is on this note, that the world of accounting tries to see how they can set up a global framework which will help the companies and other organizations in preparing statement of financial position (Balance sheet). It is important to know when a business is having profit or suffering from loss in which financial statement is illustrate, see section 334 of Companies and Allied Matters Acts including others. The accuracy and realistic basic of these documents as a mean of ascertaining the success of a business organization depend on the proper and accurate record of daily transaction of the company from which those account could be prepared.


Based on this note, the paper treats, the meaning of statement of financial position. International Financial Reporting Standards, ways of adoption, objectives, New Format of statement of financial position, economic benefit that followed the adoption, issues and challenges.


MEANING OF STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)

According to Wikipedia “ a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company”. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial years.
The statement of financial position is often described as a “snapshot of a company’s financial condition” of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business calendar year.
INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS)
MEANING: IFRS are a set of accounting standards developed by international Accounting Standard Board (IASB) that is becoming the global standard for the preparation of public company financial statement


OBJECTIVES OF INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS)
According to K. C. C. Chakrabarty (2011), introduction to international financial reporting standard highlight the following objective:
To provide information about the financial position performance and cash flow of an enterprise that is useful to a wide range of users in making economic decisions.
To reduce accounting alternatives and thereby eliminate the elements of subjectivity in financial statement.
Their objectives is to make logical reasoning in a form of a set of broad principles that provide a general frame reference by which accounting practice can be evaluated to be in line with the standard.
To promote the use and rigorous application of those standards.
To bring out coverage’s of national account standard and international financial reporting standard to high quality solution.