RSM International

One of the major benefits of using a global set of standards such as International Financial Reporting Standards (IFRS) is to increase the comparability of financial statements across the globe. The lack of comparability in global markets reduces the efficiency of allocation and the pricing of capital. Information comparability benefits not only those who provide debt or equity capital but also those entities that seek capital, because it reduces their compliance costs and removes uncertainties which affect their cost of capital. Users compare the financial statements of different entities in order to evaluate their relative financial position, performance and changes in financial position. Hence, the measurement and presentation of the financial effect of like transactions and other events must be carried out in a consistent way for different entities. The comparison of different entities is more complicated when those entities are given the option to select from a range of different accounting alternatives. Whilst this allows them to prepare the financial statements which provide information that is reliable and more relevant, it may be the case that two entities could represent the same transaction differently. Clearly this reduces the comparability of the financial statements. The International Accounting Standards Board (IASB) is committed to reducing the number of accounting options existing in IFRS and has begun the process to achieve this. Recently, the option to expense borrowing costs has been removed from IAS 23 Borrowing Costs. Other options are planned to be removed in future revisions to standards. In this document we provide a list of all presentation and accounting options which are available to IFRS preparers. It takes into consideration standards and interpretations approved as at 1 January 2008 (Bound volume 2008).