By Kofi AHOVI
Universal banks in the country have met the stipulated deadline for adopting the International Financial Reporting Standards (IFRS), as directed by the Bank of Ghana (BoG).
Information available to BusinessWeek indicates that the banks beat the Bank of Ghana’s deadline of December 2008.
The deadline, which was originally slated for December 2007, was extended to the end of December, last year to enable the banks to gradually progress through the process.
The purpose of the directive is to ensure that banks operating in the country meet international best practices with regards to financial reporting.
IFRS is 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.
The IASB is an independent accounting standard-setting body, based in London. It consists of 14 members from nine countries, including the United States. The IASB began operations in 2001, when it succeeded the International Accounting Standards Committee.
The IFRS is being promoted as a single set of high quality, understandable and enforceable global standards.
This will address weaknesses in Ghana’s national accounting standards compared with the international equivalents, and thereby enhancing proper accountability in the industry.
The use of IFRS would make it easier for financial information from Ghanaian companies to be compared with others in other parts of the world.
More than 12,000 companies in almost 100 nations have adopted IFRS, including listed companies in the European Union. Other countries, including Canada and India, are expected to transition to IFRS by 2011.
Some estimate that the number of countries requiring or accepting IFRS could grow to 150 in the next few years. Other countries, such as Japan and Mexico, have plans to converge (eliminate significant differences) their national standards.
By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier.
Furthermore, companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company-wide.
Companies may also need to convert to IFRS if they are a subsidiary of a foreign company that must use IFRS, or if they have a foreign investor that must use IFRS. In addition, companies may benefit if they wish to raise capital abroad.
The eventual adoption of IFRS by small businesses and non-profit organizations is likely to be market driven. The IASB is developing a version of IFRS for small and medium-size entities that would minimize complexity and reduce the cost of financial statement preparation, yet allow users of those entities’ financial statements to assess financial position, cash flows, and performance.
Universal banks in the country have met the stipulated deadline for adopting the International Financial Reporting Standards (IFRS), as directed by the Bank of Ghana (BoG).
Information available to BusinessWeek indicates that the banks beat the Bank of Ghana’s deadline of December 2008.
The deadline, which was originally slated for December 2007, was extended to the end of December, last year to enable the banks to gradually progress through the process.
The purpose of the directive is to ensure that banks operating in the country meet international best practices with regards to financial reporting.
IFRS is 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.
The IASB is an independent accounting standard-setting body, based in London. It consists of 14 members from nine countries, including the United States. The IASB began operations in 2001, when it succeeded the International Accounting Standards Committee.
The IFRS is being promoted as a single set of high quality, understandable and enforceable global standards.
This will address weaknesses in Ghana’s national accounting standards compared with the international equivalents, and thereby enhancing proper accountability in the industry.
The use of IFRS would make it easier for financial information from Ghanaian companies to be compared with others in other parts of the world.
More than 12,000 companies in almost 100 nations have adopted IFRS, including listed companies in the European Union. Other countries, including Canada and India, are expected to transition to IFRS by 2011.
Some estimate that the number of countries requiring or accepting IFRS could grow to 150 in the next few years. Other countries, such as Japan and Mexico, have plans to converge (eliminate significant differences) their national standards.
By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier.
Furthermore, companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company-wide.
Companies may also need to convert to IFRS if they are a subsidiary of a foreign company that must use IFRS, or if they have a foreign investor that must use IFRS. In addition, companies may benefit if they wish to raise capital abroad.
The eventual adoption of IFRS by small businesses and non-profit organizations is likely to be market driven. The IASB is developing a version of IFRS for small and medium-size entities that would minimize complexity and reduce the cost of financial statement preparation, yet allow users of those entities’ financial statements to assess financial position, cash flows, and performance.
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