Practical implementation of international financial reporting standards: Lessons learned

Practical implementation of international financial reporting standards: Lessons learned

For over three decades, the United Nations has been contributing to the global effortsaimed at promoting transparent corporate accounting and reporting. The need for a global set ofhigh-quality financial reporting standards has been apparent since the early 1970s. The existenceof a global benchmark enables direct comparison of corporate financial reports betweenjurisdictions. Such high-quality standards enhance investor’s confidence by allowing economictransactions of a similar nature to be treated and reflected in the same manner around the globe.

What was only a vision three decades ago has now become a reality. As of the beginning of 2005,over 100 countries, including the European Union, either require or permit use of internationalfinancial reporting standards (IFRS) for preparation of financial statements by enterprises in theirrespective jurisdictions.

The full benefits of such a global benchmark will be realized only when it is implementedaround the world in a consistent manner. Many developing countries and countries witheconomies in transition lack the accounting infrastructure and professional institutions needed forbuilding the technical capacity required to meet the challenges posed by the transition to acommon set of global standards – standards that are formulated with developed markets in mindand which have been becoming increasingly sophisticated.

In light of these important developments, UNCTAD’s Intergovernmental Working Groupof Experts on International Standards of Accounting and Reporting (ISAR) has been deliberatingon practical challenges that arise in the implementation of IFRS. In particular, during the twentythirdand twenty-fourth sessions of ISAR, country case studies were discussed with a view tofacilitating sharing of experiences and important lessons learned among member States.

This publication has been prepared to disseminate the lessons learned to a wider audience.

As a growing number of developing countries and countries with economies in transition areembarking on the IFRS implementation process, the need for sharing experiences and lessonslearned is becoming even more vital. It is my hope that policymakers, regulators, standard-settersand educators will find this publication to be a timely reference and a useful tool as they go abouttackling practical implementation challenges of IFRS.

Supachai Panitchpakdi
Secretary-General of UNCTAD
August 2008