Literature Review on IFRS Impact to Sri Lanka

In this section, we provide a brief overview of the theoretical and the empirical literature on the implementation of IAS 41. The literature focusing on these aspects is extremely rich. Some studies have analyzed the impact of implementing IAS 41 in only one country (Koiv et al., 2001 on Estonia; Grege- Staltmane, 2010 on Latvia; Argilés et al., 2009 on Spain; Burnside, Schiller, 2005 on Sweden). Other papers are multicounty studies (Elad, Herbohn, 2011, PricewaterhouseCoopers, 2009, Herbohn, Herbohn, 2006). In addition, some studies analyze the effects of the implementation of IAS 41 on the agricultural sector as a whole (Elad, 2004, Lefter, Roman, 2007, Mateş, Grosu, 2008) and others consider various agricultural industries: forestry (Svensson et al., 2008, Jansson, Fagerström, 2011); farm (Argilés, Slof 2001, Visberg, Parts, 2002); wine (Booth, Walker, 2001); animal husbandry (Aldea (Romanescu), 2009). The thematic approach is also different. Some studies investigate the implications IAS 41 has over the harmonization of international accounting standards. Thus, Elad (2004, p. 633) argues that through a radical departure from historical costs, the standard causes some theoretical and practical problems that might affect its widespread adoption. Moreover, it is not only incompatible with francophone countries accounting models but raises major problems of implementation in different national settings. Other studies analyze the ideological role that IAS 41 plays in legitimating social conflict in the context of companies being compelled to adopt the fair value evaluation model (Elad, 2007) or highlight the increased volatility, manipulation and subjectivity of reported earnings under this standard (Herbohn, Herbohn, 2006, Penttinen et al., 2004, Dowling, Godfrey, 2001). The problem is that the IAS 41 has generalized fair value assessment for all biological assets although not all of these assets are designated for capital appreciation or sold, which leads to a misleading information (Aryanto, 2011, p. 4). In addition, there are several models to determine fair value. The use of different assessment models leads to differences of earnings quality in agricultural sector internationally (Elad, Herbohn, 2011, p. 9). Interviews conducted in the agricultural companies have shown that IAS 41 demands a lot of extra work and it is hard to establish the fair value (Burnside, Schiller, 2005, p. 34, Elad, Herbohn, 2011, p. 88). Even though most studies are positioned against the requirement of IAS 41 to assess the biological assets to their fair value, there are also supporters of this treatment. Thus, Argilés & Slof (2001, p. 22) points out that the generalization of this model is good for small family farms that do not have the resources and skills to calculate their costs. Barlev & Haddad (2003, p. 383) argues that fair value accounting also provides a complete full disclosure and it is compatible with transparency. In other words, the fair value entails a more consistent valuation method, as well as a more reliable and comparable source of information (Argilés et al., 2009, p. 16)

Significance of Study the IFRS

Sri Lanka is an Agricultural country from the history. Every government which ruled Sri Lanka and currently ruling Sri Lanka has been allocated significant amount of resources to agricultural sector since it is a very important sector to the Sri Lankan economy. As per statistics of the Annual Report of Central Bank of Sri Lanka 2012, agricultural sector contributed around 11% to the total GDP. In addition to that as per current government’s policy publication “The Mahinda Chinthana” has also stated that the government allocates significant amount of resources in order to develop the agricultural sector in Sri Lanka. Therefore we believe that agriculture sector has a significant influence in Sri Lankan economy and as a result of that this convergence of IFRS related to agricultural companies could make an impact on the economic development in Sri Lanka. In addition, we believe that this study will help to overcome the lack of proper studies in this area since this convergence has happened during recent past.

Impact of IFRS

In conclusion, there is no significant impact on the performance due to the convergence of IFRS in the agricultural companies in Sri Lanka. As a part of our analysis we considered the impact to the key performance indicators. There we noticed that the impact is very insignificant due to the convergence of IFRS. However, we are convinced that the classification of Biological assets and Agricultural Produce changed drastically due to the convergence. Prior to the convergence Biological Assets in the Plantation sector were classified under property plant and equipment. After adopting LKAS 41, they are classified under biological assets. Therefore, it is noted that the convergence of IFRS impacted on classification and not on the performance to the financial statements. As per the management’s perception, it can be concluded that the Most of the managers prefer new standard requirements but do not have an enough and more idea about how the new standards work. Since this is a newly introduced standard under LKASs, most of the managers do not have sufficient knowledge on this area. Also management does not have enough resources to comply with the criteria specified by the standard. As an example in Sri Lanka there is an issue of lack of qualified valuers. Therefore, companies have to bear a huge cost in order to fulfill the standard criteria. Since Sri Lanka is a developing country, still it has given a priority to the agricultural sector. The government as well as the private sector is undertaking so many projects relating to the agriculture. Through accounting standards, it is expected to increase the efficiency and effectiveness of the projects. Even though a proper accounting standard for agricultural related companies are introduced, there is no significant change in the company performance identified through this research. The main reason identified is that the cost is really high in order to be applicable in Sri Lanka and lack of knowledge regarding the standard. Therefore, it is recommended that the proper infrastructure should be provided to the companies in order to comply with the standard. Further it is needed to give proper understanding to the management regarding the applicable standard. Then the huge growth in the key performance indicators will be seen.

Sri Lanka Financial Reporting Statndards

Sri Lanka Financial Reporting Standards (SLFRS and LKAS) issued by The Institute of Chartered Accountants of Sri Lanka (ICASL) is the key financial reporting framework applicable in Sri Lanka. Until 30 November 2011, the applicable financial reporting framework in Sri Lankan context was Sri Lanka Accounting Standards (SLAS) issued by the Institute of Chartered Accountants of Sri Lanka (ICASL) which were prepared purely as Sri Lankan standards less referencing to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Body (IASB). However with effect from 1 January 2012, Sri Lankan businesses had to adopt Sri Lanka Financial Reporting Standards (SLFRS) instead of SLAS as their financial reporting framework which were prepared based on the International Financial Reporting Standards (IFRS) issued by the IASB. This conversion was a highly discussed topic in the Sri Lankan Financial Reporting context since it has been made a huge impact on financial reporting process in Sri Lankan businesses. As a result of this adoption number of previously used Accounting Standards has been changed dramatically. Accordingly, the purpose of this report is to highlight the effects of IFRS convergence on the performance related to agricultural firms in Sri Lanka.

Learning Range Names

RANGE NAMES This will help you to use the labels of columns and rows on a worksheet to refer to the cells within those columns and rows. Or you can create descriptive names to represent cells, ranges of cells, formulas, or constant values. Labels can be used in formulas that refer to data on the same worksheet; if you want to represent a range on another worksheet, use only a name that is unique to the worksheet. How can we create range names? There are three ways to create range names: 1. Using the Name Box 2. Using the Formula Define Name Command 3. Using the Formula Create from Selection Command 1. Using the Name Box  Select the data range using the mouse – Click Name Box – Type the Range Name – Enter  Application – Enter some values to the selected range – now test following calculations: SUM, AVERAGE, MAX, and MIN 2. Using Formula Name Manager Functions  Select the data range – Click Formulas tab in the ribbon – Click Define Name – Type Rage Name – Select Scope – Enter Comments if you want - Click OK  Application – Enter some values to the selected range – Test different calculation formulas 3. Using the Formula Create from Selection Command  Click Formulas tab in the ribbon – Enter the Abbreviation/ name in to the first column and data range in to the next columns –  Select the Created Table – Click Create from Selection – Tick Appropriate Box – Click OK  Application – Enter some abbreviations in to the first column and values in to the second column – now test different formulas you want

Prouction Process Analysis of GC Lanka Clothing (Pvt)Ltd

The report is based on the production process of GC Lanka Clothing (Pvt) Ltd which manufactures   garments for the foreign market. Production process of the company includes three main departments named as purchasing, manufacturing and administration. A critical analysis of each and every task was conducted likewise strengths and weaknesses were identified through the analysis and thereon recommendations were produced.

Existence of a proper reviewing and monitoring system and being a large scale export company were identified as major strengths of the company. Moreover the company tends to adopt new technologies that are introduced to the industry. Proper planning of production process and a system to generate the revenue from the damages are also recognized as strengths.

Apart from the strengths mentioned above few weaknesses were identified.  Lacks of trained employees, no proper placement of process layout and lack of space are among the weaknesses.

Having identified strengths and weaknesses of the production process, recommendations were given for a better performance. Reconstruction of working environment in a way that is suitable for workers and trying to recruit employees from the rural areas were recommended as a solution to the lack of labor force.

The Impact Of Extramarital Affairs

An extramarital affair can have a huge impact on the other spouse as well as other family members. Once an affair has been exposed, seeking the right type of help may be a determining factor in the outcome of the marriage. Dr.Dilrukshi De Alwis has said that “The biggest reasons for domestic violence and marriages to break up today are extra-marital affairs.” Therefore various impacts can be occurred because of these extra marital affairs.

Financial Impact

One impact of an extramarital affair on the family is financial, which likely stems from the beginning of the affair. The cheating spouse may spend household money on lingerie, personal care or clothing to attract or please her lover. There may also be the financial burden of lost wages, paying for hotel rooms and romantic trips all of which is money that should be contributed to the home.

Emotional Impact

An extramarital affair can have a devastating emotional effect on the cheating spouse and the victimized spouse. The cheating spouse may often times find herself lying to her spouse, children, employer, friends and other family members. Emotionally, lying can cause someone to lose their self worth and credibility. The victimized spouse may feel emotions of guilt, hurt and anger toward his cheating spouse. Children are affected emotionally because of the betrayal and the fear of their parents being apart

Types Of Extra Marital Affairs

There are many types of extra-marital relationships, and while all of them are terrible betrayals of the trust and love between the couple, it directly affects the chances for survival of the marriage. Affairs are loaded with romanticism, morality, mythology, and intense emotions. They're not really about sex, but about pain and fear and the desire to feel alive. They're also about betrayal. Affairs need not necessarily wreck a marriage or result into divorce. There can be a number of reasons to start an extra-marital affair and a number of causes triggered by one spouse can be incidental to initiating an affair. What is most important is to know what has gone wrong in someone’s marriage and what he or she can do to undo it. Their cooperation and efforts is what will save their marriage.

Someone’s relationship will in fact be a lot stronger if he or she comes through this because what comes out during the course of an affair is that there were a lot of problems in their relationship and its time them to sat down together and evaluate where their went wrong. They are bound to take positive action to solve underlying problems in order to save their marriage and ultimately the bond between the two of them strengthens. Before they can decide what to do with the affair in their life they need to know what it means and what its types are.

They are,

1. ·         One night stand
2. ·         Emotional outbreak affair
3. ·         Emotional-Sexual Affair
4. ·         Sexual addiction affair

Research description of Affairs

Any way Extramarital affairs are very common among men and women alike. Earlier times, marriage life and relationships were concerned divine bonds than a social setup of life. But today, as a result of the modern thoughts and lifestyle, the divinity in life is overpowered by materialistic factors and people often consider the family life as just a necessary social structure. Extramarital affairs can have detrimental effects on the relationship and the spouse of the cheating partner.

Extra marital affairs have been in existence from time immemorial in every society. In the so-called sophisticated Western societies it has become a fashion or regarded as an additional qualification to boost one’s self-esteem to say that he or she has a ‘lover on the side’! However morally, ethically wrong or sinful to have an extra marital affair, the fact remains that millions of husbands and wives in the modern world do fall prey to this unfortunate serpent where families breakdown, and in most cases end up in divorce where innocent children are left to pick up emotional pieces left from their parents.

In the case of a man having an affair with another woman, it is said that ‘the wife is the last to know’ when her husband has strayed. She may vaguely come to know about it from the peoples’ whispering behind her back until a well-meaning friend decides to let the cat out of the bag for obvious reasons to keep the family of her friend intact. Alternatively, the husband finally eases his conscience to his wife with the truth.

What is an affair?

An affair is a sexual relationship or a romantic friendship or passionate attachment between two people. Human relationships improve through affairs. Also love, affection, compassion and human collaboration enhance by various kinds of affairs with each other and it helps to bring human beings in to a higher mental statue.  From the past many philosophers had mentioned that “Man cannot live alone” highlighting significance of affairs.

By the way there are various kinds of affairs. Such as,

o   Romantic affair

o   Extramarital affair

o   Online affair

o   Famous affairs

In this report Extramarital affairs will be highlighted.

“Extramarital affairs are relationships outside of marriage where an illicit romantic or sexual relationship or a romantic friendship or passionate attachment occurs.”

Maddoxkit who is a member of the General Interest Community has mentioned that “extramarital affairs are relations which were unfair sexual relationship, passionate attachment happens with other persons.”

Annette Lawson, a sociologist affiliated with the Institute for Research on Women and Gender at Stanford University, said various studies suggest adultery has been increasing, with 25 to 50 percent of married women and 50 to 65 percent of married men now having at least one liaison at some time in a marriage.

Extramarital affairs are not recommended. They lead to various kinds of trouble and intense emotional pain. An extramarital affair that continues in one form or another for years, even as one of the partners to that affair passes through marriage, divorce and remarriage, could be considered the primary relationship and the marriages secondary to it. This may be serial polygamy or other forms of nonmonogamy

Extramarital affairs expert, Dr. Luann Linquist has mentioned that 70% of married men and 50% of married women have an affair sometime during their marriage. But The National Opinion Research Center at the University of Chicago states that up to 17% of women in marriages have committed adultery and around 25% of men have also had affairs on their spouses.