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Harmonization of Accounting Standards

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Harmonization of Accounting Standards

Week 2: Harmonization of Accounting Standards - You Decide

Dear Mr. Herb,
Our Company is facing the issue of whether to adopt IFRS or continue reporting under domestic GAAP. Before making the final decision we need to review and discuss the pros and cons of such a transition.
“The use IFRS as a universal financial reporting language is gaining momentum across the globe. Adopting IFRS is going to be very challenging but at the same time could also be rewarding” (индус). Being principles-based, IFRS allows more leeway in how companies can portray their financial performance (news).
Moreover, you are right that IFRS will save money. As more companies go global, they won't have to spend money doing two sets of books.
The adoption of IFRS will result in better quality of financial reporting due to consistent application of accounting principles and improvement in reliability of financial statements which will finally increase trust and reliance placed by investors and other stakeholders in the Company’s financial statements (indus).
IFRS will also make cross-border investments easier. “Better access to and reduction in the cost of capital raised from global capital markets since IFRS are now accepted as a financial reporting framework” (indus). A recent decision by the US Securities and Exchange Commission permits foreign companies listed in the US to present financial statements in accordance with IFRS. This means that such companies will not be required to prepare separate financial statements under Generally Accepted Accounting Principles in the US. Therefore, companies listed in the US would benefit from having to prepare only a single set of IFRS compliant financial statements, and the consequent saving in financial and compliance costs (indus).
On the other hand, inconsistencies in IFRS such as how research costs

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