The introduction of IAS 1 (revised) to Maltese listed companies : a qualitative study of its implications for the preparers of financial statements

Abstract

The IAS 1 'Presentation of Financial Statements' is the accounting standard which sets out the overall requirements for the presentation of financial statements. The IASB reissued this accounting standard on the 6th of September 2007, with modifications to the structure and terminology of financial statements. The revised IAS 1 became effective for periods beginning on or after 1st January 2009. The IASB and the US FASB are working together to achieve accounting standard harmonisation and this IAS 1 revision was one of the steps involved in the process. This study attempts to analyse the implications of this revision for the preparers of financial statements in Malta. A number of semi-structured interviews regarding this matter were held with the financial statement preparers of Maltese listed companies. In its conclusions, this study shows that the IAS 1 revision is mainly made up of cosmetic changes and the preparers feel that its introduction will only result in minor improvements, if any, to the usefulness of financial statements. This study recommends that some form of relaxation in reporting should be allowed for small island state economies like Malta, as the current standard revisions (including IAS 1) may impede on the usefulness of Malta's financial reporting rather than help improve it.