First-time adoption of international financial reporting standards and it?s effect on entities

Globalization results in an increase in both international economic activities and the number of entities operating internationally. Due to this tendency, financial reporting of entities needs to be understandable, dependable and comparable. These requirements result in preparing financial statements in line with international accounting standards together with local accounting standards. International Accounting Standards Committee (IASC) (before 2001) and International Accounting Standards Board (IASB) (after 2001 to present) adopted the responsibility of issueing International Financial Reporting Standards (IFRS) as a guide for the preparation of financial statements globally recognized.In Turkey, Turkish Accounting Standards Board (TMSK) signed a copyright agreement with IASB and started to publish Turkish Financial Reporting Standards (TFRS) which are the exact translation of IFRSs. At present, entities which are subject to Capital Markets law apply IFRSs while preparing their financial statements. It is expected that all commercial entities are to adopt TFRSs by the enactment of the draft Turkish Commerce Law, near future.?IFRS 1-First Time Adoption of Financial Reporting Standards? should be applied when entities adopt IFRSs for the first time. IFRS 1 presents the principles first time adopters should apply. Entities shall prepare an opening IFRS balance sheet at the date of transition to IFRSs. This is the starting point for their reporting under IFRSs.The objective of this thesis is to present detailed guidelines to first time adopters of IFRSs and clarify effects of IFRSs on financial statements of the entities by making financial analysis.Key Words1.IFRS 12.TFRS 13.Opening Balance Sheet4.IFRS Financial Statements5.Capital Market Boards? Communiqués on Accounting