Question

The worldwide adoption of IFRS is something that many people do not agree on. In my opinion I think the worldwide adoption of IFRS would result in global comparability of financial statements. The IFRS was originally started to bring consistency to accounting standards and practices no matter what company it is or what country it is located. The IFRS also creates better transparency for companies that are alike.

With the good also comes the bad. IFRS is principle based compared to being rule based and this could cause some confusion on how certain things are interpreted. There also could be some language barriers that could cause issues.

As long as the companies are using integrity and stewardship and not using the IFRS wrongly and trying to not report things or trying to low ball companies when comparing because they interpreted something differently.

What Do you think of this Discussion ??

Answer 1

IFRS means Internation Financial Reporting Standards

It would be much easier for investor to compare if all the companies in the world used one common technique to report financial statements

It would be easier for layman to understand and compare and study the financials

There would be consistency in all the financials

But IFRS is not followed everywhere in the world , Every country has its own set of Accounting Standards which are suppose to be followed , yes it would be easy if everyone followed one constant accounting principle and standards.

However it is difficult for everyone to understand , due to different interpretation reasons and also due to language barrier

The main aim of financial statements is to provide true and correct picture of the company and to make sure that everything is consistently and correctly recorded

So as long as things are correctly presented i feeling following IFRS or any other accounting standard should not matter

because practically making everyone understand what IFRS is and also keeping in mind the language barrier it is difficult to make everyone follow IFRS

so as long as financial statments are not misguided I feel it is okay to use any accounting standard suitable to the country