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1、AdiscussionaboutapplicationofInternationalFinancialReportingStandardsinSingapore IntroductionThe problem of international economic accounting has become increasingly prominent with the development of multinational companies and the appearing of major regional economies in recession. It is becoming r
2、emarkable for International Financial Reporting Standards (IFRS) to solve the problem as a coordination solution. And because of the IFRS, making a countrys financial reporting standards in the accounting practice is not only confined to a countrys scope, but expanding to the wide range of internati
3、onal.In the rise of multinational corporations with the development of international trade, the requirements of comparability of financial information would cause three problems of financial accounting: the consolidated financial statements, the foreign currency conversion as well as the price chang
4、es of accounting. They are also the three problems of international accounting. In addition, the tax system and tax law are different among countries toacertaindegree.All of these, aunified standards are needing (Jamal & Tan, 2008). A global unified accounting standards applied to the company will b
5、enefit the enterprise at the aspect of decreasing the cost of enterprise guidelines to follow and the cost of user analysis. Furthermore, it also helps to decrease the chance of financial maneuver maliciously of enterprise and improve the efficiency of global market regulation. However, the building
6、 of unified standards is not so easy. There are many factors of influence should be considered, such as the political、economic、social、cultural、geographic and so on. At the meantime, the establishment of a unified criterion is controversial in the present. According To Information Statistics, there h
7、ave already 138 countries adopted the International Financial Reporting Standards (IFRS). Besides those countries, there are also more and more countries approaching to the International Financial Reporting Standards (IFRS),such as China、Japan、America. About SingaporeSingapore is a city country with
8、 strength and vigor whose land is narrow and the population density is high.( Online IFRS,2015) Singapores economy not only in the first of the Asian tigers,but also commercial services trade exports and imports are out 16 in the world. In the words of Singapore prime minister: they have achieved th
9、e goal in a generation time jumped to first world from the third world which could cost other countries more than one generation. Thus, we are interesting in exploring of its successful experience, such as some aspects their economic development. Now, we will take Singapore as an example. Singapore
10、is based on international financial reporting standards to make the domestic accounting standards, inotherwords, following the accounting standards of Singapore means complying with the International Financial Reporting Standards (IFRS) approximately. From now on, we will discuss disadvantages and b
11、enefits which the practice of international financial reporting standards brings about in Singapore in the following paragraphs.BenefitsSingapore, as an open-upcountry whose economic development depend on foreign investment mainly(Richard&Adrian 1996). Besides, Singapore has a relatively mature mark
12、et environment to invest. And it is easy for Singapore, as an international country, to make a quick reaction to the new foreign demand broughtby the change of the international economic situation. We can see that its formulation of accounting standards was following the pace of the international ac
13、counting standard setting and development closely. Singapore has been a member of the countries who apply the International Financial Reporting Standards (IFRS) to their own accounting standard setting as early as 2003. Atthebackgroundofglobalization, to achieve the goal of maximizing the profit, Mu
14、ltinational business activities must seek for more market opportunities which benefit their own development. The way to make a proper decision though making full use of accounting information to avoid risk could be a good choice. Capital market integration made investors looking for investment oppor
15、tunities in the global scope, this trend would be a chance or a trap for the foreign investors. However, the companys financial statements under different accounting standards always confuse the investors. So, for the country who wants to absorb more investors, a clear and transparent standard used
16、to reflect the condition of enterprise operation was necessary. Therefore, after adopting a unified international financial reporting standards, the result would satisfy the investors demand of knowing the operation business situation，and benefiting to absorbing the foreign investors. At the same ti
17、me, the International Financial Reporting Standards (IFRS) has got support from the United Nations (UN), the organization for economic cooperation and development (OECD), international federation of accountants and so on. Moreover,the world bank, Asian development bank, the London stock exchange and
18、 Hong Kong stock exchangewhich as the representative of the worlds most stock exchangesall require the enterprises to follow the International Financial Reporting Standards (IFRS) to show financial statements, clearly and transparently. Now, we will make a simply introduction about Singapore, and ex
19、tend base on the perspective on the model of economic development in Singapore. Asto itslocation, Singapore is one of the hubs connecting the Pacific and Indian oceans. From other aspects, as we all know, at the meantime, Singapore is also a member of the WTO and separate customs territory. The expo
20、rt-oriented economic development strategy was conducting in Singapore. Export-oriented economic development strategy means Export industrialization strategy. Specifically, to participate in international competition in a broad and deeper level ,try to absorbing foreign capital actively、releasing the
21、 limitation to foreign investment environment、encouraging exports、developing the labor-intensive industries by using of local labor resource advantages. （WTO.org,2015） Since 1996, Singapore was always putting significant proportion on developing service industry and information industry. And acceler
22、ating economic internationalization and liberalization, promoting a high science and technology base on the development of service industry and information industry. In recent years, the government advocates to conducting regional economic strategy and put forward to “creating new Singapore” and so
23、on. Under these slogans, a series of measures are taken to speed up foreign investment、carry out varies economic activities actively and make up the implementation of strategic plan to promote the transition from traditional economy to knowledge economy to promote economic restructuring. It is neces
24、sary for Singapore to choose international financial reporting standard as their accounting standard because of Singaporean economic development pattern( Preiato, Brown, & Tarca, 2013). Most important of all, many benefits would brought about though adopting the International Financial Reporting Sta
25、ndards (IFRS).More than one advantages can be list, such as enhancing the confidence of the international capital markets and making a more transparent international capital market. As we all know, to make the financial information comparable, there are too many obstacles to overcome between differe
26、nt countries. IFRS is a useful way to solve the problem mentioned above .Besides of those, the International Financial Reporting Standards (IFRS) can also help to lower the cost standards of enterprise and the cost of analysis for users to obtain useful information. Furthermore, a unified standard c
27、an improve the efficiency of global market regulation, and reduce the opportunity which, sometimes,ever-present enterprises repeat the investors through controlling their financial situation displayed. It is no doubt that those immoral and hoggish behaviors would damagetheinterestsof foreign investo
28、rs by misleading the investors to make the unwise judgment. In a word, the choice of International Financial Reporting Standards (IFRS) for Singapore can benefit to achieving the goal of absorbing foreign investment effectively and speeding upexport-oriented economic development. Some practical exam
29、ples can used to clarify, for example, under the condition of the Southeast Asian financial crisis of 1997; Singapore is the only one country whose model of financial was open and survived. Thats because Singapore has formed a good investment environment as adopting international financial reporting
30、 standards. For Singapores attracting investment、foreign trade、 prosperity of the securities market，the international financial reporting standards have made a lot of contributions(Cotter, Tarca, & Wee, 2012). In view of the present development station, accountingstandards in different countries ten
31、d to similitude today in pace with globalization of product and financial market. And that will be an inexorable trend. Most of countries in the world will make their accountingstandards by considering theconcrete nationalconditions based on the International Financial Reporting Standards (IFRS). Ju
32、st talking about Singapore which has a mature capital market; it has already owned the advantage to attractforeign capital and foreign enterprises compared to other relatively closed countries. From other aspect to discuss about International Financial Reporting Standards bring out in Singapore. Sin
33、gapore is a country where encourage export. Through executing the International Financial Reporting Standards, making the accounting of import and export more clear. That practice will bring obvious benefits to the development of Singapores export business. In the era of economic globalization, the
34、choice of practice International Financial Reporting Standards (IFRS) will be beneficial to the Singapores long-term development in the future not just limited in the present moment (Yaacob & Che-Ahmad, 2012). It is reported that Singapore accounting standards committee has announced that the accoun
35、ting standard in Singapore will adopt the International Financial Reporting Standards (IFRS) totally to ask the joint stock limited company listed in Singapore to draw up their financialreport begin with 2018(I, 2015).LimitationsIn consideration of different countries have their own culture、politica
36、l、religious belief and so forth, there must be different social and economic situation in different countries. For instance, different development levels、different economic aspect .It is easy to know that no one standard can be guaranteed to fit all countries. International Financial Reporting Stand
37、ards (IFRS) as a unified standard applying to so many countries, it will make a significance influence on the worldwide pattern of interests distribution. From the development of Singapore, International Financial Reporting Standards (IFRS) shows that the accounting in Singapore becomes more and mor
38、e international. But there are some bad results caused by IFRS. For example, conflict between domestic and international benefits may happen, in other words, if companies in Singapore completely follow IFRS, the cost of these companies will increase substantially, which has negative influence on att
39、racting foreign capital and protect the benefits of investors. As a nation with a export-oriented economy policy, it is likely to avoid these results if Singapore sets the accounting standards benefiting itself according to domestic condition. However, a series of advantages must be lost brought by
40、IFRS. It is clear that these problems have been paid much attention in Singapore and IFRS is not completely accepted blindly, so that this nation accepts IFRS selectively. Namely, foreign companies listed in Singapore are allowed to follow IFRS,GAAP and FRS to make financial report, what is more , a
41、bandoning the rule that these foreign companies must adjust the financial statements which follows GAAP or IFRS into ones which follow FRE(financial report standards set by Singapore)( FAROOQUE & YARRAM, 2013). The policy plays an important role to attract foreign investment and protect benefits of
42、investors. In a word, all aims are to serve this nation and the society. In addition, Singapores accounting system is set by the institute of certified public accountants and auditing, from the development of Singapores accounting standard; we can see clearly that Singapores accounting system is clo
43、se to International Financial Reporting Standards (IFRS), gradually. As we all known, Singapores accounting standards are set by the civil organizations and the social people from all walks of life together, this also fully embodies the universality of its accounting standards. (Businessteacher.org.
44、uk, 2015） Thats to say, International Financial Reporting Standards(IFRS) was fit Singapores model of economic development and promote it also satisfy the demand of the people. However, just copying the International Financial Reporting Standards (IFRS) could lead to failure and short-sighted. And s
45、ome reasons can be used to explain it. First, the differences in reality cannot be ignored among nations. Second, International Financial Reporting Standards face a number of challenges: how to coordinate the relationship between improving the degree of openness of International Financial Reporting
46、Standards and maintaining financial stability ;how to deal with the differences between International Financial Reporting Standards(IFRS) and US General Accepted Accounting Principles(US GAAP); how to coordinate the relationship between “the world recognition” of International Financial Reporting St
47、andards and “the local influence”; how to deal with the relationship between the principle-based mode and the rule-based mode of International Financial Reporting Standards ,in other words, how to provide more operational guidelines when preserving the principle-based mode, and so forth.ConclusionIt
48、 can be learned from this case about Singapore that IFRS can be viewed as a sword with double edges which has both advantages and disadvantages. And for a purpose of serving more nations better, IFRS has been improving. The changes of development of contents of International Financial Reporting Stan
49、dards start from 2001 years(Ghedrovici, Mihaila, Erhan, & Birca, 2014). Preceding standards, namely International Accounting Standards (IAS), have become sounder and more general after modified, in terms of the international social economic field. Of course, there exist more and more countries which choose or close International Financial Reporting Standards, and as a result, the accounting standards of these countries trend to be s