REQUIREMENTS

One of the main objectives of the adoption of the International Financial Reporting Standards (IFRSs) is to assist users to make a comparison about the financial performance of companies from different countries. Choose two companies from two different countries which adopted IFRSs and access their latest annual reports. Based on the information in annual reports:

1. perform financial statement analysis for these two companies using relevant ratio analysis. (15 marks)
2. assess the performance of these two companies. (15 marks)
3. discuss the problems associated with cross-border financial statement analysis. You need to refer to FOUR journal articles to support your discussions.

Objective of the Preface to IFRS

The objective of the Preface to International Financial Reporting Standards is to set out the International Accounting Standards Board’s (IASB’s) mission and objectives, the scope of International Financial Reporting Standards (IFRSs), due process for developing IFRSs and Interpretations, and policies on effective dates, format, and language for IFRSs.

IASB’s objectives

Under the IFRS Foundation Constitution, the objectives of the IASB are:

1. to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world’s capital markets and other users of financial information make economic decisions;