The need for improved accounting and financial reporting remains a top consideration for organizations as they pursue effective assessment of a company’s performance. Globalization is a leading cause in which business performance measurement has required the establishment of standardized protocols that would help companies realize consistency in their reporting. This would include the provisions of IAS and IFRS for employee benefits, which have shown a greater commitment to ensuring that companies create an enabling environment. Each of the standards provides a critical framework in which the realization of organizational goals follows standardized actions and processes to ensure consistency in reporting and evaluating the overall performance. IAS and IFRS provisions on employee benefits are critical in serving the interest of employees, investors, regulators and the company. The importance of the standards in protecting the welfare of the employees is profound, especially by improving accountability levels in which actions preceding a certain decision, such as the voluntary termination of an employee, would be assessed. In this context, it is easy to realize a ground in which resolutions can be identified while maintaining solid relationships between the employer and employees. Understanding the structure and requirements of IAS and IFRS is critical to realizing a supportive work environment.

Introduction

Globalization has emerged as a top consideration in which businesses have emerged to seek standardized operation. This includes the provision of financial reporting to enforce accountability. These concepts are deemed important since they allow comparison of companies to assess their competitiveness relative to how one business varies from another. The information is considered critical with respect to allowing the investors, members of the public and the organization to assess the feasibility of the business operations. Common measurement standards, such as International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), have consistently evaluated Employee benefits across organizations. These standards have played a critical role in determining a company’s commitment towards realizing the support for improved employee benefits. The IAS, following its amendment in 2011, has consistently provided an update on the requirement of every organization to account for employee benefits by stipulating issues such as salaries, wages, annual leave, termination benefits, and retirement benefits.

On the contrary, the IFRS provides a report by organizations specifying the amounts the employees will receive as benefits in relation to risk and investment within the company. Such obligations are important for realizing transparency while allowing easy assessment of the company across a common measuring grid. IAS and IFRS have gained popularity following their importance and relevance in accounting standards to enhance effective financial reporting. IFRS provides a more comprehensive guideline, while IAS offers guidelines on specific accounting issues. The purpose of this report is to provide a comparative analysis of IAS and IFRS for employee benefits based on the differences, motivation and reasons for differences, impact and consequences, challenges and opportunities, as well as recommendations for improving the outcome of the standard.

Literature Review

A study by Liapis & Thalassinos (2013) asserts the importance of using standardized financial report approaches towards realizing transparency and accountability. This is a critical reference in which IFRS has been cited as a convergence with IAS to provide a framework for improving financial and accounting reporting. The aim is to promote an unbiased understanding of international financial reporting systems that have been adopted as an exchange of globalization, where the competitiveness of companies would be assessed in the context of how well an organization seeks to improve its employees’ welfare. The standards are outlined to provide a uniform assessment of a company’s performance by investors, regulators, and the organization. IFRS has been adopted in over 100 nations to improve global accounting standards as a dialogue that is important towards realizing a globalized market that is easy to track and record progress in financial health. Thus, regulation protocols such as IAS and IFRS are used to bridge the gaps in practice created in relation to the governance of finance issues among interconnected nations. The benefits are also extended to the market, regulators, and the company.

The guidance by IAS 19 provides that an organization is obligated to report the employee benefits in terms of the liability and expense that an employee has while providing services. The employee benefits are