Principles and Assumptions in Financial Reporting Based on IFRS

Abstract

Financial reports are the language used by the business community. The business language was compiled from accounting standards which are measurement budgets for financial statements. This study aims to reveal the content based on the principle of conservatism contained in the financial accounting standards (GAAP) output of the converged International Financial Reporting Standards (IFRS). The use of the principle of conservatism is still controversial, but some studies actually justify the importance of applying these principles, especially in the face of environmental uncertainty. Justification of the importance of the inconsistent principle of conservatism using IFRS. Several research outputs state that IFRS does not recognize the principle of conservatism. With deep problems in this research is to reveal why IFRS does not recognize the principle of conservatism. The required output based on this research is the conservatism of the principle taxonomy structure and normative theory justification to standardize accounting treatment. The analytical method used is content analysis, which is analyzing the content of information against a set of regulatory accounting standards. The aspects evaluated are related to using accounting standards for accounting for companies in Indonesia, especially those that go public.