Challenges in adopting IFRSs
01 Jun 2005
We have posted a presentation titled Learning the Language: Challenges Being Encountered in the Adoption of IFRS (PDF 32k) by Piet Hoogendoorn, Chairman of the Deloitte Touche Tohmatsu Board of Directors, at a conference in Dubai on 29 May 2005. In addition to discussing the challenges of IFRSs, such as interpretation, consistent application, enforcement, and education, Mr.
This brings us to one of the greatest benefits of IFRS – that it should ultimately lower the cost of capital. First, because the internal costs of compliance – all the accounting systems necessary to maintain the same basic information according to different accounting standards – will be reduced. More of the company's productive capacity can be spent on being productive, rather than on compliance. Second, because investors, analysts, and regulators will have to know only one or two accounting languages, they should be able to price securities more efficiently. As they become familiar with the language of IFRS, and as more companies report using IFRS, users, especially analysts, will be able to compare companies from different countries directly, without making rough and ready adjustments. |