International Financial Reporting Standards-A Conceptual Study

Because of globalization the integration of world market has been increasing for goods, services and capital-with the result that traditionally were reliant on their domestic capital markets for financing now have substantially increased access to debt and equity capital both inside and outside their national borders. Hence there was a requirement to have a single set of accounting standards throughout the world. One of the main advantages of a single set of global accounting standards is that it would enable the international capital markets to access and compare intercompany performance in a much more meaningful, effective and efficient way. Thus the request for global standards came both from regulatory bodies and from preparers of financial statements. The International Accounting Standards Board (IASB) reports that almost 120 countries require or permit the use of International Financial Reporting Standards (IFRS).