The International Financial Reporting Standards

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This report aims to provide the executive directors and senior level management, of Fujitsu with a condensed insight into the potential use of the International Financial Reporting Standards (IFRS), as a substitute method of “corporate disclosure to its’ current reporting standards (GAAP)”, (American Institute of Certified Public Accountants, 2014). This report will analyse the primary benefits and limitations of adopting the IFRS as one of many accounting standards, thus ultimately aiming to provide a convincing recommendation as to its’ adoption and future application in Fujitsus’ operations and methods of financial reporting, (American Institute of Certified Public Accountants, 2014). The IFRS foundations’ primary goal is to develop a…show more content…
Thus allowing easier comparability between home-based operations and in international financial markets, (Jordan, 2013). Furthermore, Fujitsu has subsidiaries located globally that may require or permit the use of IFRS and will highly benefit from the use of one method of reporting the standards. In turn allowing improvements in efficiency of corporate decision-making and optimal allocation of the company’s scarce resources, (Hicks, 2012). Further, the adoption of IFRS will allow Fujitsu to gain global investment opportunities, where “institutional investors increase holdings in firms that have adopted the IFRS”, (Brown, 2010). Investors will be more willing to “provide financing with greater transparency amongst different firms’ financial statements”, in saying so, it will allow Fujitsu to increase the accumulation of foreign capital through improving the quality of financial reporting and allowing greater transparency when recording the financial performance of the corporation, (American Institute of Certified Public Accountants, 2014). Hence reinforcing that multinational conglomerates are economically advantaged when using only 1 reporting standard, (Dumont, 2012). In addition the IFRS ensures to provide companies, such as Fujitsu with more “accurate, timely and comprehensive financial information” as it abides by national reporting standards (Jordan, 2013).
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