First Time IFRS Adoption Help

Discussion in 'Exams and Studying' started by jenweis72, Oct 21, 2018.

  1. jenweis72

    jenweis72

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    I wrote a paper on the following:
    why adoption of IFRS 1 was met with controversy and how a company , a 2010 first-time adopter, presented its statement of financial position and what alternatives were available.

    I need an international student's/persons perspective on why adoption of IFRS has been met with controversy. Outline is below. Any perspective would be greatly helpful!!!


    Q1.why adoption of IFRS 1 was met with controversy

    IFRS using fair value accounting to value most of the items of the financial statements. The use of fair value accounting can bring a lot of volatility and subjectivity to financial statement. It also involves a lot of work at arriving at fair value and valuation experts may be used.

    Changes in tax liability - Federal, State and Local Taxes

    Implementation Costs including hardware changes, software, training and education

    If costs of adopting IFRS was greater than its benefits

    The requirement to perform a full impairment review each time a subsidiary receives a dividend from a subsidiary, associate or jointly controlled entity might add a significant amount of time to the preparation of financial statements on an on-going basis and could be a significant cost in terms of both preparation and external audit
    Revenue recognition changes
    Under USGAAP revenue is recognized when it is realized, realizable

    Legal and Regulatory changes

    Debates in the U.S. focused on restating the balance sheet accounts and earnings without using LIFO inventory could result in lower earnings and greater debt on the balance sheet.

    Effect on firm value from such extensive retrospective application

    Political

    Convergence with IFRS is already a contentious issue in the US
     
    jenweis72, Oct 21, 2018
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