engleski

Financial Reporting Standards: between De Jure and De Facto Harmonisation

The financial reporting standards harmonisation process has been developing streaming to enhance the capital markets globalization by providing information necessary for making investment decisions on global markets.The process is expected to contribute to decreasing of the information asymmetry, and in such a way to lower cost of capital. We can explore harmonisation process through harmonisation of financial reporting standards and regulation, de jure harmonisation, and through harmonisation of financial reporting practice of companies, de facto harmonisation. These two aspects could differ significantly over countries, as it is proved by empirical study results, presented in the paper, based on the survey of Croatian financial reporting practices. The gap between the two aspects has brought us to the new accounting solutions, i.e. from International Accounting Standards (IAS/IFRS) for all companies to the new set of Croatian Financial Reporting Standards for non-listed SMEs, trying to increase the compliance with standards in the real practice. The implementation of standards is particularly analyzed in the light of SME's financial reports preparers and users' needs.Some observations highlighted could be used in rethinking of future reporting standards developments via regulatory framework, as well via its implementation in practice.

financial reporting standards, de jure harmonisation, de facto harmonisation, SME

nije evidentirano