Financial Accounting
Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter D, Problem 1DQ

Briefly discuss why global accounting standards are needed in today’s business environment.

Expert Solution & Answer
Check Mark
To determine

Discuss the need of global accounting standards in a business environment.

Explanation of Solution

International Financial Reporting Standards (IFRS): IFRS are a set of international accounting standards which are framed, approved, and published by International Accounting Standards Board (IASB) for the preparation and disclosure of international financial reports.

Due to tremendous growth in international commerce, the companies require to report to the users outside the nation. Due to variances in accounting standards across the nations, the financial statements of the multinational companies were incomparable and difficult to deduce conclusions. To minimize such differences, global accounting standards, IFRS, were emerged, and international businesses migrated to IFRS.

Conclusion

Thus, global accounting standards were emerged to solve the variances in accounting standards.

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