The adoption of IFRS by the European Union

Level: Undergraduate | Grade: First | Approx. Word Count: 1,950

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Overview

The objective of this paper is to examine the rationale for the EU’s adoption of IFRS, the main aims of the standards and identifying the key areas of these changes, providing comparisons with the pre-IFRS approaches. To add value to the discussion an examination of the impact this change has had on a UK corporation (British Telecom) is also provided

The International Financial Reporting Standards (IFRS) were originally developed in the late 1990's. However, it was not until the mid 2000's that the EU, as a result of its own failure to introduce harmonised financial reporting standards across its member states, somewhat reluctantly decided to adopt the IFRS principles. As was to be expected, this has had a significant impact on the financial statements presented by corporations domiciled in the EU member states, including those headquartered in the UK.