PATTERNS OF VIEW AND APPLICATION OF CONVERGENCE IFRS

(Ardin Dolok Saribu, Nonni Sise Riani Manihuruk, Ayang Pratama)

(Doctoral's Students Universitas Sumatera Utara)

ABSTRACT Differences in accounting rules applicable in many countries could pose problems of comparability (comparability) financial statements. This problem can image for akunt ansi in a country does not come from factors - the state of local factors. With the difference in economic conditions and standa accounting, the accounting practices in each country be different as well. The problem comes when pe rkembangan gatra technology Seol a h t anpa Limit (borderless). The company will register in another gatra hampered by the differences in standards between countries. The need for international investors to be able to compile the inter-company financial statements between countries also experienced obstacles. These conditions are congratulations to the international standards that apply to all countries. The effort to send the international financial community in a single has grown deeper than 40 years (Thomas, 2009). This study aims to discuss the meta-theory structures used by the FASB and the IASC in developing conceptual frameworks, studying fundamental differences, analyzing the constraints and identifying the efforts to be implemented in order for IFRS to be implemented by member countries. This research was conducted by comparing the basic framework set forth in FASB and IASC and then analyze the barriers that arise with the implementation of IFRS and identifying how these obstacles can be resolved.

Keywords: globalization, harmonisas i, meta theory, FASB and IASC, IFRS.

1. INTRODUCTION Linda Keslar (Zeff and Dharan1994: 28) says, "how different accounting rules in force in many countries, giving rise to problems of comparability of financial statements.

This condition can certainly be understood, because in the process of preparing accounting standards in a country can not be separated from the influence of local factors of a country.

Problems begin to arise when international technological developments change the world into a global village, countries seemed without limit. This era is popularly known as globalization.

In the context of accounting, it appears international accounting that tries to describe the theory and practices of accounting that apply internationally. Harmonization of financial accounting standards in the form of International Financial Reporting Standards (IFRS) applies internationally, and in the process of compilation of political factors and economic conditions become irrelevant.

In the global scope, there are two standards composing bodies relating to international accounting practices. The bodies are The International Federation of Accountants (IFAC), and The International Accounting Standards Committee (IASC). IASC concentrates more on making International Accounting Standards (IASs). Meanwhile, IFAC focuses more on developing International Standard Audits (ISAs), codes of ethics, educational curricula, private sector accounting standards, and rules for accountants in business or those involved in technology. It is desirable to have a standard acceptable to all the countries of the world. With the existence of internationally accepted standards, financial statements have expected a higher power comparability between countries. Of course, these efforts towards international

Finance report International (International Financial Reporting Standards-IFRS) IN 2001 and the Financial Accounting Standards (Financial Accounting Standards FAS) The Created by the Financial Accounting Standards Board (Financial Accounting Standards one

council FASB) in Murai Law. Harmonization of standardization efforts be changed because

understanding the differences in standards between countries and can accommodate comparable Harmonization is, "The level of coordination or similarity among various

national levels accounting standards and methods financial reporting. "Harmonization

covers two aspects: (1) Material harmonization (de facto) refers IN harmonization between the accounting practices of the different businesses of the same or NOT From the regulations, and (2) Official harmonization (de jure harmonization) at the level of harmonization between accounting rules or regulations of the country or a different group (Wolk, Doddd and Różycki (2008).

With the formation of IFRS (continuation from IAS) by the IASB, the IASB co- operation with the organization's network standard setters in many countries is getting stronger. The European Union (EU) Part gatra committed to implementing IFRS for all companies listed in the area of their jurisdiction effectively at in 2005 (Ramanna and Sletten, 2009). At first the term harmonization used as a means to align the standards that already apply Sales Manager (Accounting generally accepted Principles-GAAP) with IFRS The decision on the use p elaporan Standards (IFRS) Year ON 2012 of course give impact to business actors, managers and investors creditors, as well as for banking as a financial institution and not lose it is educational and accounting profession. The aim of this study to discuss the structure of the meta-theory used by the FASB and the IASC in developing the conceptual framework, studying the fundamental differences, analyze the obstacles faced and identify measures that should be done so that IFRS can be applied by member states.

RESULTS

In reviewing the viewpoint and application of IFRS convergence, in this study there are 2 terms of conceptual framework to be discussed, namely: FASB has developed a conceptual framework model of the so-called Statement of

Financial Accounting Concepts (SFAC), which consists Of Seven Expressions That SFAC

No. 1 ABOUT purpose financial reporting by business organizations (1978), SFAC No. 2 on the qualitative characteristics of financial statements (1980), SFAC No. 3 on the elements of financial reporting businesses (1980); SFAC No. 4 on financial reporting purposes for non- business organizations (1980), SFAC No. 5 on recognition and measurement of business finance report (1984) and SFAC No. 6 elements of financial statements: substitution of the concept of FASB No 3. SFAC No. 6 aa SFAC No 3 and amend SFAC No. 2 and SFAC No. 7 on the use of cash flow information in accounting measurement (2000). This framework is the theoretical basis for the FASB in the development of financial accounting standards in the United States.

IFRS which became an international standard in the preparation of the financial statements have been prepared by the conceptual framework of the International Accounting

Standards Committee (IASC) The so-called Framework for the Preparation and Presentation

ie "set the underlying concepts preparation and presentation

of Financial Statements,

financial statements. "(Mirza, Orrel Dan Holt, 2008). IFRS conceptual framework to present

financial statements, which essentially contains five main objectives: (1) the purpose of the financial statements (paragraphs 12-21), (2) the basic principles (paragraphs 22-23), (3) the qualitative characteristics that determine the usefulness of information in the financial statements (paragraphs 24-26), (4) elements of financial statement elements set forth in measurements- elements that make up financial statements (paragraph 99 -101) (Mirza, Orrel and Holt, 2008).

The IASC establishment agreement took place on 23 June 1973 in the UK, represented by the accounting profession organization of nine countries, namely Australia, Canada, France, West Germany, Japan, Mexico, the Netherlands, Britain and the United States (Nobes and Parker 1995: 9; and Solomons, 1986: 60). The purpose of establishing the

IASC is, "to formulate standards and promote acceptance and abiding by IFRS extensively in the world. (Solomons 1986: 60). IASC basic conceptual framework contains five main elements, namely 1.

The purpose of financial statements set forth in paragraphs 12-21.

2. The basic assumptions outlined in paragraphs 22-23, and the concepts of capital and capital maintenance as outlined in paragraphs 102-110.

3. Qualitative characteristics that determine the usefulness of information in financial statements set forth in paragraphs 24-46

4. The elements of the financial statements set forth in paragraphs 47-81 5.

Definition, recognition is outlined in paragraphs 82-98, and the measurement of the elements that make up the financial statements is set forth in paragraphs 99-101.

This framework is intended as a reference for the financial accounting standards drafting committee in the development of future financial accounting standards and in retrospution against applicable financial accounting standards.

OBSTACLES AND EFFORTS IN THE IMPLEMENTATION OF IFRS

The use of IFRS has no effect on a company's performance for investors in an interesting perusahaanakan IFRS information and will lead to changes in the perception of the company's performance. By using the company will nemperoleh results IFRS financial statements using the global financial reporting language to be evaluated globally (Cordazzo, 2007). Access international diplomacy Manulife Life will be easier because of the financial statements easily communicated to the investor's global Another impact is the relevance of financial statements for more Lots of fair value using. But on the other hand, financial performance (profit) will be volatile due to fluctuating market prices using the use of IFRS-

based comparative principals can slightly decreased due to the use of can be boarded by the

interests of professional management that will benefit themselves.

Preparation of accounting standards in the IASC does not involve all members of the huge numbers, but by some countries when called G4 + 1 consisting of representatives from national standards bodies of countries of Australia, Canada, New Zealand, United Kingdom and United States. The reason for the formation of G4 + 1 is that IASC members are too many, consisting of fixed and non permanent members, and very diverse. The diversity of representatives sitting within the IASC also reflects the diversity of the economic level of the countries it represents, it sometimes requires compromises to agree on a standard.

Although most members of the IASC have approved IFRS, but not all members of the IASC apply in their respective countries. In contrast to members who are members of G4 + 1.

They gathered intensively and worked full time. In any development project is done, they develop into the scope of their respective countries. Since these G4 + 1 members are developed countries with sophisticated financial markets, very few compromises occur. Developed countries will dominate the development of financial markets. The information

Australia. If international accounting standards are intended to apply to all members of the IASC, which has many differences, then this is a barrier that may be difficult to solve.

Radebaugh (1975: 41) suggests that many environmental factors have an effect on the development of objectives, standards, and accounting practices. This framework includes eight factors, which are generally the eight factors present in each country, of course with very different levels and characteristics. Characteristics and different levels between countries is a fundamental obstacle encountered in the process of harmonization of financial accounting standards, Solomons (1986: 63) Another obstacle that arises is the difference between needs and wants developed countries to underdeveloped and the country is very high economic growth rate and the country with a lower rate of economic growth even very low.

What must be done by the IASC as the body of the international accounting standard is to make the members feel the need to implement IFRS. The first step is to apply for recognition through the International Organization of Securities Commissions, so that the (State) company will crossborder the listing using IFRS in their financial reporting. This action is followed by recognition by existing securities or regulatory commissions. If this happens, it will encourage multinational companies for listing on foreign stock exchanges. Second, the

IASC standard setters should set up an agency separate from the accounting bodies. To that end, the IASC must restructure. Currently, IASC is dominated by professional accounting bodies as standard compilers. Restructuring is expected to encourage self-sufficiency in terms of both funding and operational.

CONCLUSION

The implementation of IFRS has proved to be a very serious obstacle, because there are so many differences between member countries, whether in the social, cultural, legal, characteristics and levels between countries are fundamental constraints faced in the process of harmonizing financial accounting standards. Another obstacle that arises is the difference between needs and wants developed countries to underdeveloped and the country is very high economic growth rate and the country with a lower rate of economic growth even very low.

What must be done by the IASC as the body of the international accounting standard is to make the members feel the need to implement IFRS

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PATTERNS OF VIEW AND APPLICATION OF CONVERGENCE IFRS