3. Influences by Ifrs (International Financial Reporting Standards)

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Influences by IFRS (international financial reporting standards) The company should adopt the full IFRS (International Financial Reporting Standards) as adopted by the European Union. It is because of the fact that the company operates internationally and a compliance with the standards of IFRS will help it to make its financial statements easier to compare with the statements of the company across countries, with the competitors across the industry sector and beyond, along with improving the quality of disclosures in the financial statements. The usefulness of the adaptability to the IFRS can be identified by having a look at the results of a survey report assessing the impact of IFRS on the financial health of the nations under the European Union. The following were the results of if Ericsson applying IFRS: The adaptability of IFRS has made the understanding of the financial statements easier, which was very complicated earlier. The companies have also seen that their dialogue with the investors, creditors, and other stakeholders and with the other companies in the marketplace has increased rapidly after the introduction to IFRS. The investors in European Union believed that the application of IFRS had made an improvement in the overall quality of the financial statements published by various firms. Greatest impact on income and shareholder equity were standards regarding capitalization of development costs, business combinations, share based payments, and financial instruments. The preparers of the financial statements also stated that the fund managers and analysts also found it easier to make their decisions for the companies after the introduction of the IFRS. Therefore, by looking at the positive impacts of introduction of International Financial Accounting Standards (IFRS) by the European Union, it can be very easily said that Ericsson should also adopt
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