ifrs

Why is Enron, one of the United States energy giant, can achieve a phenomenal growth in a short time, then went bankrupt in a short time too? "Science" is used by Jeff Skilling, the genius graduate of Harvard Business School and a former McKinsey consultant leading firms to achieve all that? He replied: accounting. Who would "protect" and to approve Enron's accounting practices before it was revealed? Nothing else is a public accountant Arthur Andersen.

Accounting is the only major business language in the capital market. Without a good accounting standards, capital markets will never walk properly because of the financial statements are also major products in the mechanisms of capital markets. Effectiveness and timeliness of financial information that can be transparent and relevant than is required by all stakeholders (employees, suppliers, customers, institutional credit providers, even government). Stakeholders are not simply want to know the financial information from one company alone, but from many companies (if they could, perhaps of all companies) from all over the world to be compared with each other.

The question is, how these needs can be met if the companies are still using the forms and financial reporting principles different? International Accounting Standards, better known as International Financial Reporting Standards (IFRS), is a single standard of high quality accounting reporting and accounting framework based on principles that include strong professional valuation with a clear and transparent Disclosures regarding the economic substance of transactions, the explanation until you reach a certain conclusion , and the related accounting transactions. Thus, users of financial statements can easily compare the financial information of entities in various parts of the world between countries.

The implication, adopting IFRS means adopting a global financial reporting language that will create a company can be understood by the global market. A company will have a greater competitive advantage when it adopts IFRS in its financial statements. Not surprisingly, many companies that have adopted IFRS have significant progress when entering the global capital markets.

At international level, IFRS has been adopted by many countries, including European Union countries, Africa, Asia, Latin America and Australia. In Asia, Hong Kong, Philippines and Singapore had already adopted it. Since 2008, an estimated 80 countries require companies that have been registered in the global stock exchanges to apply IFRS in preparing and presenting its financial statements.

In the Indonesian context, convergence of IFRS with the Guidelines for the Financial Accounting Standards (SFAS) is very important to ensure national competitiveness. Changes in financial reporting procedures of Generally Accepted Accounting Principles (GAAP), GAAP, IFRS or else to have very broad. IFRS will become mandatory œkompetensi € â-€ Barua? for the public accountant, appraiser (Appraiser), management accountants, regulators and accounting educators. Can accounting workers face changes constantly be made to meet the needs of the global market for financial information? How does this prepare Indonesia for IFRS?

Since 2004, the accounting profession in Indonesia has been doing the harmonization of GAAP / Indonesian GAAP and IFRS. Convergence of IFRS expected to be achieved in 2012. Although IFRS are still not yet fully implemented this time, preparation and readiness to welcome him will give its own competitiveness for business entities in Indonesia.

With the adoption of IFRS readiness as a single global accounting standard, an Indonesian company will be ready and able to transact, including mergers and acquisitions (M & A), lintasnegara. Noted a number of acquisitions lintasnegara have occurred in Indonesia, for example, Philip Morris' acquisition of Sampoerna (May 2005), acquisition of stakes in Bank of Bank Lippo and Bank Niaga (August 2005), nor against Buana UOB (July 2005). As Thomas Friedman said, "The World is Flat", M & A activity lintasnegara is not unusual. Because IFRS is intended as a single global accounting standards, the accounting industry readiness of Indonesia to adopt IFRS will be competitive at the global level. This is the advantage of adopting IFRS.

For business people in general, question and challenge traditional: whether the implementation of IFRS requires a high cost? Nothing, some parties have complained about the amount of investment in information systems and information technology company that had to be carried to follow the requirements that are required. The answer to this question is clear, the adoption of IFRS will cost, energy and time is not light, but the cost for not adopting it would be far more significant. Indonesian firm management commitment to adopt IFRS as a prerequisite to enhance the competitiveness of Indonesian companies in the future