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Category: Business and Industry

Date Submitted: 09/25/2014 02:01 PM

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* Conversion to IFRS offers companies a number of important benefits. Companies that operate in a global environment and comply with foreign reporting requirements can streamline their financial reporting. This will reduce related reporting costs by developing common reporting systems and will ensure consistency in statutory reporting.

* Furthermore, comparison and benchmarking of financial data with international competitors would be possible.

* Adoption of IFRS will make cross border acquisitions and joint venture possible and also provide access to foreign capital. This is because majority of stock exchanges require financial information presented according to the IFRS.

* Early adoption of IFRS may offer an edge to the companies over their competitors as they can claim early adoption. This, in turn, will enhance the brand value of the company. The companies can trade their shares and securities on stock exchanges world-wide. For this, most of the stock exchanges require financial statements prepared under IFRS.

* Another major benefit of convergence is that the management of a company can view all the companies in a group on a common platform. This will reduce the time and efforts involved to adjust the accounts in order to comply with the requirements of the national GAAP.

* Business acquisition would be reflected at fair value in IFRS rather than the carrying values. This would ensure greater transparency in the financial statements.

* The implementation of IFRS in the corporates would require trained accountants, auditors, valuers and actuaries. This will boost the growth of the service sector also as India can emerge as an accounting services hub. Moreover, a single set of accounting standards worldwide would ensure that auditing firms standardise their training and quality of work is maintained globally.

Implementation of IFRS would thus ensure the following benefits:

* Same accounting language...