What is IFRS?
IFRS stands for “International Financial Reporting Standards”. Businesses around the world use this trusted and internationally recognised system to accurately organise and report their financial information. The accounting system IFRS in Thailand and beyond (120 countries and counting!) has become the required accounting framework to prepare and disclose financial data.
In a nutshell, IFRS requires businesses to report their financial position and results using the same rules. Excluding any fraudulent or manipulative practices, this means firms using IFRS can compare apples to apples as there is uniformity across the board between financial results*. IAS (International Accounting Standards) is an older financial system that was replaced by IFRS; the two methods should not be confused.
The mission of IFRS, a non-profit organisation, is to bring transparency, accountability and efficiency to global financial markets. However, it’s worth noting here that the United States does not use IFRS; they follow GAAP (Generally Accepted Accounting Principles). Whereas IFRS is about general principles, GAAP is more rules-based and considered more complicated and restrictive. While there is a movement afoot to combine the two accounting frameworks, so that eventually there will be little or no difference between the two systems, as yet the switch has not occurred.
*Financial institutions and publicly accountable companies (i.e., those listed on the public stock exchange) are legally required to share their financial reports in line with accepted global accounting standards.
What does IFRS cover?
IFRS incorporates a broad array of financial topics, with the five main areas being Asset, Liability, Equity, Income and Expenses.
Some of the fundamental areas covered are as follows:
- Borrowing costs
- Employee benefits
- Fixed assets
- Foreign exchange rates
- Freeholds and leases
- Healthcare plans
- Income taxes
- Intangible assets
- Investment in associates
- Operating segments
- Preparation of financial statements
- Revenue recognition
- Superannuation plans
Do I need a specialist IFRS accounting tool?
Yes, you most definitely do. No matter your industry or size of company, a specialist accounting system for IFRS in Thailand will greatly benefit your business. A financial and business management accounting system will enable you to effortlessly handle financial control, financial reports, budget control and real-time analysis and keep up with rapidly changing requirements in global accounting and budget control standards, corporate governance and technology.
Some of the many good reasons to use a professional system are as follows:
- Automated cross-checks and validations
- Comply with US SOX and JSOX requirements
- Easy integration with front-office and other legacy systems
- Improve visibility into business processes and performance (management accounting)
- Improve user productivity through easy reporting, querying and data entry
- Increase financial closing cycle time
- Reduce costs and risks via rapid implementations for local and global roll-out projects
- Reduce accounting errors
- Real-time posting and reporting – payables, receivables, general ledgers
- Seamless integration with Word and Excel
- Secure web-based accounting system
What’s more, any sound system will be able to output directors’ reports and declarations; corporate directory and shareholder information; public company appendix; risk and ratio reports; internal review reports; consolidated spreadsheets; audit trails; and comprehensive income, financial position, equity and cash flow statements.
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