Why IFRS Should be Adopted in the Place of GAAP Personal Statement

Why IFRS Should be Adopted in the Place of GAAP - Personal Statement Example Secondly, companies that adopt IFRS are able to compare and contrast their financial report to those of their leading international competitors. Use of IFRS creates significant access to foreign investments and capital markets. IFRS facilitates cross-border ventures, acquisitions and spin-offs. The early adoption of IFRS, before it made mandatory, enables companies to have a leading edge. Such companies would experience benefits related to conversion, as their competitors miss out. It is worth noting that the mandatory adoption of IFRS has certain inherent challenges, but not without solutions. Companies must ensure that IFRS adoption is not only treated as an accounting exercise, but also as an enterprise-wide and strategic program that requires support and sponsorship of proficient leadership. This is especially because planning up-front and efforts in obtaining buy-in in the organization are uncertain, a condition that may constrain normal business operations. In this regard, ther e must be the application of a company’s financial knowledge within new policies during adoption to IFRS. Additionally, there is the need for financial measures that will improve the assessment of IFRS reports ( National Professional Service Group). When such control measures are put in place, there is a high probability that the organization will add more finance personnel that would be well informed about IFRS reporting. Is if not enough, it is expectable that companies are likely to add information to proficient information technology systems. Under IFRS, business contracts that were currently issued and the debts agreement will have to be renegotiated under IFRS rather than the U.S. GAAP. On the other hand, organizations are only supposed to budget for the transition to IFRS, as well as for costs associated with external advisory  services. Management of the stakeholder expectations, which entails planning, budgeting and investor relations, would also be necessary.