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Major advantages of IFRS can be summarized according to benefited groups which are as follows :
1.Uniform Accounting standards provide efficiency gains both internally and externally .
2.Internally multinational companies would make savings if all the their subsidiaries could use the
same accounting System.
3.A similar internal reporting system gives the chance of better comparisons,less confusions and
mistakes between the parts of the company .
5.One set of Accounting standard could be used in various jurisdictions and capital markets .
1.Investors banks or owners are interested in obtaining information which enables them to make
buy/sell/hold investment decisions.
3.It would enable investors banks or Financial analysis to make better decisions .
4.For the society at large it can be said that harmonized and converged accounting standards are
important .
Advantages to Investors :
A strong case for convergence can be made from the viewpoint of the investors who wishes to invest
outside their own country .Investors want the information that is more relevant,reliable ,timely and
comparable across the jurisdictions .
The industry is able to raise capital from foreign markets at lower cost if it can create confidence in
the minds of foreign investors that their financial statements comply with globally accepted
accounting standards .
1.Wide Gap
IFRS is very much different from present accounting policies being followed .There are big
differences expected in accounting for financial instruments deferred taxes,business combinations
and employee benefits .
2.Increased Responsibility
The change to IFRS opens up certain choices a company will have in flow to account for some items.
3.Tax Implications
IFRS convergence will have a significant impact on the financial statements and consequently tax
liabilities tax authorities should ensure that there is clarity on the tax treatment of items arising from
convergence of IFRS.
4.Distribute Profits
IFRS is fair value driven which often results in unrealized gains and losses.Whether this can be
considered for the purpose of computing distributable profit is still to be debated .
2. Project Planning