A comparative analysis of the requirements of recently introduced IFRSs with GAPSE and their impact on the adoption of either of the reporting frameworks

Abstract

This dissertation provides an insight of the legal and financial reporting obligations of Maltese registered companies. Chapter one identifies that companies are required to prepare financial statements in accordance with Generally Accepted Accounting Principles and Practice. This term is being analysed in detail in this chapter which also identifies that Maltese companies can adopt either International Financial Reporting Standards (IFRSs) or Generally Accounting Principles for Smaller Entities (GAPSE) in the preparation of their financial statements. Chapter two of this dissertation identifies the main changes being recommended by the proposed Single Accounting Directive. This proposed Directive is aimed at reducing the financial obligations applicable to micro-entities as well as to SMEs. Chapter helps in providing a wider approach to the analysis being made in this dissertation which is aimed at assessing the likely impact of the recently published IFRSs on the general level of adoption of GAPSE. Chapter three identifies the salient differences between IFRS 9, 10, 11, 12 and 13 and the respective sections in GAPSE. The comparative analysis identifies differences between the two financial reporting frameworks in relation to recognition, measurement and also disclosure requirements. Chapter four outlines the main findings of the research which involved the use of interviews. The scope of the use of interviews was to obtain an understanding of the likely impact which the recently published IFRSs might have on the level of adoption of GAPSE as perceived by registered audit firms. In addition, chapter four highlights factors which have an effect on the level of adoption of GAPSE that are not directly linked with the financial reporting aspect of eligible Maltese companies. Chapter five summarizes the findings of this dissertation. It also identifies recommendations which are likely to further promote the general adoption of GAPSE by eligible Maltese companies.