Business Finance Homework Help

In an internet article for paperwritings.com, (https://www.paperwritings.com/free-examples/criticalanalysis-of-ifrs-essay.html), the authors state that the:

“Adoption of the IFRS in many countries has various advantages. It will lead

to economic stability in different countries due to the increased foreign investment

and division of labor. There will be decreased transaction costs such as training,

accountancy, and audit fees for foreign investors. IFRS greatly reduces earnings

manipulation as it increases the transparency of financial statements. There are

mandatory disclosures in the off-balance sheet items that make it hard for the

company accountants to manipulate the profit and asset figures. It also decreases

the costs of equity. The investors are able to understand the accounting data of

investments clearer reducing the perceived risks of the project. They are more willing

to accept lower returns.

Finally, the IFRS encourages fair value accounting which shows the investors

the market prices of the company’s assets and liabilities. It acts as a signal in times

of economic boom and depression. It also encourages and ensures corporate

governance in the company which leads to healthy companies.”