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Essay on Benefits of Getting International Accounting Standards

Project id 1000596
Subject area Arts Entertainment
Document type Essay
Words 1810
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The purpose of this essay is to discuss the benefits of having global criteria, reasons for domestic differences and difficulties in gaining agreement for standards. There are numerous advantages of having international standards. Primarily, this essay will only look at 4 benefits, which are comparability, credibility, principles and discipline. Secondly, this essay will state three nationwide differences and rate their difficulties in gaining agreement. Eventually a conclusion. Comparability is an accounting principle. The fundamental accounting reports will need to be reliable; if they're not reliable it isn't comparable. If the company can't make a comparison then the accounts come impaired. For example, the Financial Accounting Standards Board requires that expenses connected to development and research (R&D) should be expensed when incurred, but some companies expensed R&D when obtained. While a few other companies deferred it to the balance sheet and then expensed them at a later date. Furthermore, the accounts need to be dependable and standardised therefore the investment decision makers will make legitimate inter-company comparison. To make this comparison meaningful accounts are ready with recommendations laid down by the Financial Reporting Standards. Credibility is linked with similar events, which create comparable outcomes. If companies were performing a similar occasion to be able to produce financial reports, which disclosed totally different results the business could lose their credibility, this is because firms can select different accounting policies. It's important if financial statements reveal a true and fair view. Discipline aids the security of investors this is related in with the monitoring board. The required standard...

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