THE CHANGES IN ACCOUNTING STANDARDS ITS IMPACT ON FINANCIAL STATEMENT

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In recent years, there has been a lot of criticism about accounting standard and the impact of the recent changes in financial report they prepare. A lot of people have led to question the validity of the profit measuring procedures applied in arising at the profit disclosed in published accounting. Quite a number of proposal have been made in an attempt to reform the methods generally in used. This has resulted in coming together of different countries with a view to working out modalities for the standardization of these profit measuring and reporting procedures. The international accounting standard committee (IASC) produces international accounting standards (IAS) to be followed by all member countries, of which Nigeria is one of them. Also they also produce additional statement to accounting standard (SAS) in an attempt to make the international standard meet with the local condition with the aid of globalization and increasing demand for transparency. The (IASC) as reconstructed in 2001 by creating the international accounting standard board (IASB) among other changes.

A new set of rules, which would align Nigeria with other countries and also improve investors confidence was formed in May 2011 known as international financial reporting standards (IFRS) which was issued out by international accounting standard boards which is globally accepted specially IFRS are defined in comprise 1  13 in issue of the international financial reporting standard (IFRS) issued by IASB from 2001 2  29 is issue of international accounting standard (IAS) issued by IAS before April 2001. 3  15 in issue of interpretations originated from the international financial reporting standard international committee (IFRSIC) 4  11 in issue of the standard interpretation committee (SIC) statement, issued before April 2001. The 13 IFRS in issue are: IFRS  1  – First time adoption of IFRS IFRS  2  – Share based payment IFRS  3  – Business combination IFRS  4  – Insurance contract IFRS  5  – Non-current asset held for sale and discontinued operation. IFRS  6  – Exploitation for and evaluation of mineral resources IFRS  7  – Financial instruments disclosure IFRS  8  – operating segments IFRS  9  – Financial instrument IFRS  10  – Consolidated financial statement IFRS  11  – Joint arrangements IFRS  12  – Disclosure of interest in other entities IFRS 13  – Fair value measurement. This work intends to analyze and examine the impact of these standards, the financial statement with particular emphasis on Guinness Nigeria Plc Benin, Edo state.