International accounting standards add value to stakeholder?

Question

PLZ HELP

Answer 1

Hi Ronnie, it will help to take a step back and ask: what is the main driver behind international accounting standards?

The answer is simple: today we have more international investors in companies than ever before.

For example, take any serious investor, and there is a good chance that they have an international portfolio. Therefore, it is increases the need for uniform rules for accounting -- whether its America, Europe or Asia.

If you are an investor in many different companies across the world, and if they all use the same accounting standards, you can measure their relative performance much better. You will have to do less work at your end to reconcile specific differences.

It also helps the company management because they don't have to explain the same facts in different ways to different investors.

So yes, international accounting standards adds value to all stakeholders.