Caso Hyder

International Corporate Reporting




Starting from the year 2005 countries and enterprises that are operating from their various countries around the world were required to implement the International Financial Reporting Standards (IFRS). The conviction was it will enhance their performance, it will enable them to tailor down cost of procuring capital, it will make their businesstransparent for investors, hence it will increase the amount of investment that gets its way towards their coffer. The fact that it will add to the growth of the overall global economy was part of the consideration. The drive to come up with some kind of a coherent method of accounting and reporting so that businesses could be able to present their operation to whoever has a direct interest in whatthey are doing, while at the same time since doing so creates a transparency that will be helpful in showing investors how a given business entity is operating, enabling them to make an informed investment decision. This idea was embraced within the understanding that various countries and businesses that were operating in different jurisdictions had been using varied standards that were notcoherent when it comes to spotting opportunities when taking financial or investment measures.


That led to the coming together of various countries to form what was called International Accounting Standards Committee (IASC) that evolved at around 200l into International Accounting standard Board (IASB). (PriceWaterhouse Cooper) The ISAB was responsible for coming up with IFRS and whenInternational Organisation of Securities Commission (IOSCO) made IFRS a standard requirement in the year 2000, especially for those that are listed globally, it led many countries into adapting the system. Eventually it was made mandatory that every publicly traded company as well as others will have to start using IFRS by the year 2005 and since then many countries had adapted it into their systemto the point where currently, there are not businesses small and big that are allowed to use any kind of other accounting standard with few exceptions. (PriceWaterhouse Cooper)


However, it does not mean some countries would not find it difficult to converge their old method to the new global standard that they would find a bit complicated as it was attested by various findings and maybeit must have been costly too. This problem had come to the attention of certain organisations that had launched effort to harmonise the problem and one such an organisation was International Federation of Accountants (IFAC). Other organisations such as the World Bank and UNCTAD are also playing the harmonising role by focusing on economic. Their involvement could be elevated to a point wherethird world countries and countries whose economy is in transition that includes the new entrants in the EU would get help to muster the ability to make a sound accounting and financial reporting practice. (Finance NZ Prelim)


In light of that, other factors that contributed and necessitated the coming into the picture of IFRS were the global economy had been undergoing drastic changesover the years in such a way that the overall capital market had followed a trend where it has become global and integrated more than ever. It is possible to find the evidence for that by studying the various stock exchanges where the number of companies from outside of the host country had been on the rise. The New York Exchange for example, has up to 59 countries that are non-US originating froml2 countries. The NASDAQ has 338 companies originating from 35 countries. The same applies to the London Stock Exchange where l7% of the 60% of its major market capitalisation is from outside of the country. This means every stock exchange has a god percentage of companies under its roof that originated from other countries


Consequently, a need had arisen where there will have to...