Global Adoption of IFRS: Reasons, Benefits, and Barriers

Global adoption of IFRS 1
Reasons for the global adoption of International Financial Reporting Standard (IFRS)
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Global adoption of IFRS 2
Reasons for the global adoption of International Financial Reporting Standard (IFRS)
International Financial Reporting Standard (IFRS) was adopted because of the increasing
need for a globally convergent or harmonized accounting standards. Although IFRS has
received support globally, some jurisdictions are still hesitant to accept it. This blog address
issues that surround the adoption and acceptance of IFRS in the global platform.
The benefits of IFRS to the investors
The financial and economic markets are becoming global. Financial reporting and
performance comparison requires a standardized and high-quality accounting standard. IFRS
gives investors an opportunity to rely on single accounting language which makes it easier to
interpret companies' activities (Bayerlein & Farooque, 2012, p. 98). Currently, IFRS has been
accepted in over 200 jurisdictions and is fully applicable in 85 jurisdictions for domestically
listed corporates. Investors of Multinational Corporations can comfortably use IFRS to
analyse the performance of the companies across different jurisdictions (Nijam & Jahfer,
2016, pp. 69-78).
The attractiveness of IFRS as a global accounting standard
The International Accounting Standards Board (IASB) developed IFRS in collaboration with
other accounting boards such as FASB, and US-GAAP among other bodies. IFRS is
attractive because it is based on the principle aspect of transactions as compared to the rules-
based GAAP standards. IFRS is more attractive because it addresses the economic relevance
of each transaction (ICAEW, 2018).
Possible barriers to the global adoption of IFRS
There are several barriers that have been identified as possible barriers to the global adoption
of IFRS accounting standards. First, some users hold that the principle aspect of IFRS makes