What are IFRS and benefits they have for companies

What are IFRS and benefits they have for companies

The International Financial Reporting Standards, better known as IFRS, are accounting models created to unify criteria about the financial information that companies must present. In this way you can stimulate national and international business.

Who created IFRS?

IFRS were created by the International Accounting Standards Board who are also in charge of everything related to regulations. This is an organization founded in England in 2001, successor to the International Accounting Standards Committee, which was created in the year 1973.

Implementation process

The Central Board of Accountants and the Superintendencies are defined in Law 1314, fulfilling the role of disciplinary authority. Sometimes they become guests for the companies.

ERP to implement IFRS

An ERP should help you implement these standards easily. The accounting services Colombia counts on updated software capable of running financial reports.

An accountant in Colombia can help you keep your accounts easily, register your IFRS accounts and see the differences with local regulations. Through an accounting agency in Colombia, you can have more information about everything in this process.

Benefits of implementing IFRS in companies

Companies have numerous benefits when implementing IFRS, among them are:

  • Standardize information: The information that you can give to the public, banks, shareholders and stakeholders is standardized, which allows unions, superintendencies and entities carry out harmonized economic projections and statistical work.
  • Recognition of assets and liabilities: It is carried out taking into account the current value with relevant and real information to know your business, assess taxes and make decisions.
  • Greater transparency in information: Financial information is not far from fiscal information; this is key so that you know the current state of your business.
  • Maturity in accounting matters: thanks to IFRS, DIAN demands alignment at the moment of filing between international and fiscal standards. By doing so, you will gain more clarity regarding your company and achieve a more effective and dynamic tax process.

Importance of IFRS for Colombian companies

You can get your company to understand its global financial transactions in a simple way, through the IFRS for Colombian companies. Even though you do not make international transactions, you can keep your information up to date and make decisions in line with the law.

Three aspects of the importance of IFRS in Colombia

1. Transparency

Your company either national or international can understand, review and compare everything in a simple way. Due to its universal language, the information that requires analysis by an entity is easy for anyone to understand.

2. Responsibility

IFRS are global, with them you can generate accurate information aligned with legal issues. Every part of your company must be held accountable. The foreign and domestic offices are involved in the transition.

3. Efficiency

This standard worldwide standard must be taken into account for information processing. Due to the universal language, all financial and accounting information can be quickly analyzed.

Impact of IFRS in Colombia

As a consequence of commercial exchanges with different countries, the way of recording and treating accounting and financial information has evolved considerably. Being analyzed and understandable in a single language. IFRS was born to analyze, present and unify the financial statements of your company. Thus, they have made the information verifiable and comparable for investors and users in the country.

IFRS are reliable for investors as they maintain an easy-to-understand language for your company.