Zhumabekova Kristina
IAS KAS
IFRS/IAS are issued by the International Accounting Standards Board (IASB) and regulate every aspect of accounting activities, providing necessary methodological and legislative base. International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.
IASB IS FULL-TIME, INDEPENDENT, STANDARD-SETTING BODY AND ITS MEMBERS ARE CHOSEN FOR THEIR EXPERTISE IN ACCOUNTING. ITS MISSION IS TO CREATE A SET OF HIGHQUALITY ACCOUNTING STANDARDS THAT CAN BE CONSISTENTLY APPLIED WORLDWIDE. THIS IS A DIFFICULT MISSION, BUT THE STRUCTURE AND POLICIES OF THE IASB ARE WELL-SUITED TO ACHIEVE IT. THE IASB'S STANDARDS BECAME MANDATORY FOR MANY LISTED COMPANIES IN THE EU AND OTHER COUNTRIES BEGINNING IN 2005. IT WAS A HUGE STEP FORWARD IN TERMS OF INTERNATIONAL CONVERGENCE IN ACCOUNTING STANDARDS. ONE SET OF STANDARDS IS ACCEPTABLE IN SOMETHING LIKE 100 JURISDICTIONS. IT IS A GREAT BENEFIT TO INVESTORS AND OTHER FINANCIAL STATEMENTS USERS WORLDWIDE.
INTERNATIONAL FINANCIAL REPORTING STANDARDS International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. The rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable and relevant as per the users internal or external. IFRS began as an attempt to harmonise accounting across the European Union but the value of harmonisation quickly made the concept attractive around the world. They are sometimes still called by the original name of International Accounting Standards (IAS). IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new International Accounting Standards Board took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and Standing Interpretations Committee standards (SICs). The IASB has continued to develop standards calling the new standards International Financial Reporting Standards (IFRS).
The Kazakhstan Accounting Law which is also known as provisions of the Law on Accounting and Financial Reporting of 1995 generally regulated the accounting standards in Kazakhstan (World Bank, 2007). Before the recent amendments on February 28, 2007, IFRS was required to be used in preparing financial statements by financial institutions from January 1, 2003, by joint stock companies from January 1, 2005 and by all other entities (excluding state-financed entities) from January 1, 2006 in accordance with this Law (World Bank, 2007). Before these dates, all the entities were required to apply Kazakh Accounting Standards (KAS) as approved by the relevant government organization (World Bank, 2007). However, under the amendments, “micro- enterprises would continue to apply simplified tax-based rules; small and medium-sized enterprises (SMEs) would be required to apply KAS; and public interest entities (PIEs) and large companies would be required to apply IFRS”(World Bank, 2007). For banks and insurance companies in Kazakhstan, they are required to comply with IFRS. As to the companies listed on the highest listing category of KASE (Category A), they must follow IFRS in the preparation of financial statements (World Bank, 2007). On the other hand, companies listed on the lower listing category (Category B) can chose to follow either IFRS or KAS (World Bank, 2007). Kazakhstan is considering to adopt IFRS for SME for business entities which are not Public Interest Entities (PIEs) in place of the existing KAS(World Bank, 2011). Kazakhstan’s IFRS is required for the public interests’ entities, it is necessary to provide ongoing education on the importance of IFRS implementation in Kazakhstan through facilitation of participation in round tables, seminars, etc. ( Action Plan, 2012).
There also differences between KAS and IFRS (such as permitted methods for valuation of inventory – KAS includes 4 methods and allows LIFO, while IFRS is not, or valuation of Fixed Assets – under IFRS revaluations of FA and inventory are made on regular basis to ensure that the carrying amount reflects fair market value while under KAS FA may be revalued once in several years and there is no revaluation of inventory) that complicate a transition process.
What is IFRS? How many countries have fully conformed with IFRS as promulgated by the IASB and include a statement acknowledging such conformity in audit reports? When Kazakhstan’s companies obliged to act in accordance IFRS/IAS? What is differences between KAS and IAS? What is IASB?
References: Chamber of Auditors of the Republic of Kazakhstan (2012). Action Plan. Retrieved from http: //www. ifac. org/sites/default/files/complianceassessment/part_3/201201 -Kazakhstan(Co. ARK%20). pdf World Bank, 2003. Republic of Kazakhstan: Report on the Observance of Standards and Codes: Accounting and Auditing. Retrieved from http: //www. worldbank. org/ifa/rosc_aa. html World Bank. (2011). World bank helps kazakhstan improve quality of financial reporting for small and medium-sized entities. Retrieved from http: //web. worldbank. org/WBSITE/EXTERNAL/COUNTRIES/E CAEXT/0, , content. MDK: 22814486~menu. PK: 2246556~page. PK: 28651 06~pi. PK: 2865128~the. Site. PK: 258599, 00. html @import url(http: //www. adoptifrs. org/Cute. Soft_Client/Cute. Editor/Load. ashx? type=style&file=Syntax. Highlighter. css);
