Many economies have accepted IFRS. So many companies across world have implemented IFRS and have started reporting according to the IFRS. The implementation to the IFRS results into huge benefits for the company. These benefits come in many ways and forms. These have huge impact on the competitiveness of the companies as well as it offers huge opportunities to the companies. This also provides better options for the finances. These benefits of implementation and reasons to implement these IFRS can be summarized as below:
Fair Representation of Financial Statements
The representation of financial statement will be fairer in case if the company adopt to the IFRS because this will be prepared according to the international standards and there would be no such a treatment in that may look like favorable or unfavorable to the investors from whole the world irrespective their nationality. So the representation and interpretation will be fairer for the investors. This will provide right and exact information about the company and company would be able to attract more investors for the company’s current operations as well as for the future operations.
Adaptation to the IFRS will make the financial statements homogeneous to the rest of the world. With this company would be able to stand with the rest of world in times of globalization of businesses. This will increase the ease for the investors and analysts to invest and comment of the company because neither the investors nor the analysts needs to put extra efforts or money to understand and compare the statements with other companies in the industry across the world while assessing the company’s performance for investments of commentary. The homogeneous representation will ease this process.
Expansion to other geographies
The company can easily expand its business without thinking much on the financial compliance in different countries as the slowly the whole world is implementing these IFRS guidelines. So the expansion to other geographies will cost either non money or very less while preparing financial statements. Also the company would not have to prepare multiple financial statements for different countries and then report to those countries in different formats. This will save money and time of the management.
The adaptation to the IFRS will increase the competitiveness of the company because adaptation to the IFRS will signal to the fair and right practice at the company. This will increase the attractiveness of the company in financier’s eyes across the world and the company would be able to attract finances from any part of the world.
Planning and Strategy
The adaptation to the IFRS will provide huge tools in the hand of management for planning and strategy making. The homogeneous financial statements will provide opportunities to the management to compare the financial statements with other companies in the industry or from other industries to increase the efficiency of the financial planning and get the best trends in the world.