Benefit of Adopting Ifrs to Business

Benefits of Adoption IFRS for business

Brown (2001, pp. 270-272) seems to dismiss the idea that the benefits of adopt International Financial Reporting Standard (IFRS) in many countries cloud be found some general comments, such as capital market participants can use higher quality information to make better decision and improve competitiveness.

With the developing of international business, some major issues of international accounting has appeared, such as the finical report, foreign currency exchange and change in price. The tax law and tax are different between each country as well. Therefore, it may be necessary to adopt IFRS. There are lots of aspects of benefits of adoption IFRS. The aspect of business’ benefits will be presented as following. The benefits of business could be distinguished in two parts. The first is about more efficient capital market. The second is lower reporting cost.

At the first, it is acknowledged that the aim of adopting international financial standards is to improve the financial reporting quality and efficiency of capital markets (Cotter, Tarca & Wee 2012, p. 396). With the continue development of international trade in international market, there are increasing the requirements of obtain the information and the comparability of financial information. Each company by adopting IFRS can decrease the cost of capital in their country and will provide more effecting finical statement in the same basis compare with the other competitors for international investors. The reason shows that unified the global accounting standards will be beneficial to deduct enterprise and analysis cost, it also helps to decrease opportunities of financial to operate the business capital and to improve the efficiency of regulation in global market. Accounting information is needed for the transnational companies to reduce the risk and find the market opportunities, to achieve the object of maximization profits. However, different financial...