MGT 401 GDB SOLTION FALL Fall 2017 last date 31-jan-2018

Solution Idea of Financial Accounting II

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Idea Solution:

The International Financial Reporting Standard has many advantages but have some disadvantages also. Some small

entities have good accounting system but forced to incur the cost to change the new accounting system. Local rules and regulation and tax laws of the each country is different. In some cases, entities may require to prepare different

financial statements for local laws and tax departments.

Advantages

·         Accounts that are prepared under IFRS have a set structure that makes them easily readable and comparable with prior years and other companies

·         Additional disclosures increase the transparency of the accounting judgments made which benefits the shareholders

Disadvantages

·         Additional disclosures are longer and stricter and as such will require more work and will therefore cost more to produce and audit.