Question

State whether you are for or against this proposed change from GAAP to IFRS, defending your position with at least three points.​

Answer 1

I would prefer the proposed change from GAAP to IFRS due to the following reasons:

1. There is a prompt recognition of the loss incurred in order to bring about a transparency in the functioning of the organization and this in turn is of benefit to the investors , the lenders to the organisation and the stakeholders of the organization.
2. IFRS involves the standardization of the financial reporting activity which eventually helps in the comparison of financial statements in major financial markets. This has the effect of removing the trade barrier due to which EU has been making an effort to adopt single reporting standards.
3. Most of the companies in Europe and other joining countries across the world have taken steps in creating a   huge foundation for the acceptance of IFRS , IFRS helps the companies in accessing the financial markets by having the financial statements prepared under one single reporting standards and this helps comparibility at the international level.
4. IFRS works towards the EU member countries being consistent not only at the macro level in respect of economic aspects and matters , but also helps in the financial reporting which in turn improves the equation between the investors and companies which are functioning in the member countries.