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What is IFRS? Advantages of IFRS

International Financing Reporting Standards (IFRS) are the rules and regulations of accounting set by the International Accounting Standards Board and International Financing Reporting Standards Foundation. These rules are to be followed while preparing comprehensive financial transaction reports of an organization. IFRS regulations are acknowledged internationally, that makes the financial statements globally understandable. While IFRS has been adopted by almost 140 nations to maintain their accounting standards, for example United States follows their own Generally Applied Accounting Principles (GAAP).

The main purpose of IFRS rules is to ensure transparency, high standard, and comprehensive, internationally accepted financial reporting. When countries are following the IFRS rules, it is obligatory for them to meet the specified standards in their accounting and financial reports publishing. Analyzing your company’s financial performance will give you a better insight of your business operations, following with your competitors and possibility to make changes accordingly.

Advantages of IFRS

1. Following IFRS helps companies to make comparable financial statements that are accepted globally. This saves a lot of time for companies, instead of making multiple reports according to different standards you only have to follow one set of regulations. The process of evaluation and analyzing of financial reports globally becomes easier.
2. Adopting IFRS framework makes your financial statements accurate, transparent and free of manipulation. This regulation makes sure that all the required information about your financials are provided.
3. It helps companies to attract foreign investors as the framework is recognized globally. It gives you an international market exposure, that facilitates foreign trade and encourages business development. Your business can create international mark following these accounting standards.
4. Under IFRS accounting standards, businesses will get fast access to precise and in-depth financial reports which can help analyze your business performance and help improve day to day operations.
5. Improving financial records can minimize any errors in the financial statements as well as reduce risk of penalties.