How to Learn IFRS (Part 1)
The world has been constantly moving to the single set of global accounting rules. There is a strong ambition to adopt IFRS as a unified set of financial reporting standards all over the planet by 2015. So yes, I understand that accountants and other finance people need to gain at least some degree of IFRS knowledge, since they might face IFRS directly in their job. Maybe it’s also your case.
Now, how to learn IFRS? Where to start?
Well, it depends. First, you should ask yourself at least the following questions:
- What is your current knowledge of IFRS? None at all? Or have you already acquired some base?
- What is your purpose of learning IFRS? How deep knowledge would you like to possess? Do you want to obtain some certificate or “offcial” qualification or just learn it to be able to deal with it in your job?
- What is your budget for learning IFRS? Do you want to keep it free or with minimal financial cost? Or you have a quite generous budget for this?
- How much time are you able or willing to dedicate to your IFRS training? Are you very busy guy and have only evenings / weekends? Or can you afford to skip some days from your daily job and visit classes?
Yes, all this matters, because there are many options what and how to do. So let’s say you are an accountant or financial guy with solid accounting base, but IFRS is something you have heard of but never really touched. There is a certain path to follow no matters tools you chose. Being me in your shoes, I would start my IFRS learning as a step-by-step process:
- Learn the basic structure of IFRS
- Read the Framework
- Get some knowledge about individual standards
- Develop your knowledge and be up-to-date
So let’s start with the first one.
1. Learn the basic structure of IFRS
Familiarize yourself with the basic structure and concept of IFRS. This is not a hard part. To start digging a bit deeper into this complex topic, you should know what is in front of you. Let me draft a simple picture.
IFRS is an acronym for International Financial Reporting Standards and covers full set of principles and rules on accounting treatment of various items or situations. This full set comprises the following components:
- Framework for the Preparation and Presentation of Financial Statements
- International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS)
- Standing Interpretations Committee (SIC) and Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC)
2. Read the Framework
For any beginner in IFRS, the Framework is the basic concept of IFRS and therefore it is a MUST READ document. Anyway, it’s not so time consuming, as the Framework itself has only about 30 pages and as an experienced accounting professional you would be familiar with many concepts in it. You can find full text of the Framework in www.ifrs.org.
3. Get some knowledge about individual standards
Now while you can read the Framework yourself without any pain, it’s almost impossible and ineffective to read and study the texts of individual standards, interpretations and accompanying docs – it’s more than 3 000 pages!
There are many possibilities how to learn basic principles and rules in individual standards. You might want to pick one of them based on your time and budget available. In my opinion, 2 main streams of learning IFRS are face-to-face training and self-study.
What I mean by saying “face-to-face” is attending a classic form of the study: long-term courses in the class, short-term seminars or workshops, etc. This should work wonderfully – I learned most of my IFRS basics this way. Let me just sum up pros and cons of face-to-face training:
- learning from experienced tutor with personal contact
- high level of interactivity – you might ask for additional explanations or any questions you don’t understand and often you get a feedback from your tutor
- full focus on the topic – when you attend a lecture, you will not be distracted by so many things around you (like 5 minutes for coffee, 5 minutes for “very tiny help” to your colleague or family member) and therefore, your study will be very effective.
- high costs – if you’d like to attend really high-quality training, you will pay for it – oh yeah. I remember that the cost of my 6-day course on IFRS was about 4 000 EUR. Of course, tutor and topics covered were wonderful, however, if cost is something that bothers you, then check out other forms of training.
- time consuming – face-to-face training usually takes place during your normal working or business hours and you must find a space in your overloaded schedule. That might be a problem, especially during a high or busy season.
- inconvenient – you might also suffer from certain form of inconvenience. Often, you have to travel to the location that is far far away from your office or home. Or, you might feel distracted by other attendants in the class.
In the second part of this article, I will give you some hints how to effectively learn IFRS by self-study and what good sources you could use in order to stay up to date with the newest developments.
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