International Financial Reporting Standards

Improved information and communication technologies have dramatically changed the financial reporting environment, reducing the barriers of physical distance and making information available globally at the touch of a button. This has brought new international investors into the capital markets with an increasing demand for information on which to base their investment decisions.

They are, however, not just interested in information produced by one company - they want to be able to compare that company with its competitors too, whether they're based in the same country or another part of the world.

As a result the demand for financial reporting standards that transcend national borders has never been stronger. International Financial Reporting Standards are set to fulfil this role.

In making the change to IFRS, you are adopting a financial reporting language that will enable your company to be understood in a global marketplace - many early adopters have already found that it helps them to access world capital markets, reduce costs and position themselves as international players.

Adopting IFRS allows multi-national groups to apply common accounting across their subsidiaries, which can improve internal communications, and the quality of management reporting and group decision-making. At the same time IFRS can ease acquisitions and divestments through greater certainty and consistency of accounting interpretation.

In increasingly competitive economic environments, IFRS allows companies to benchmark themselves against their peers worldwide, and allow investors and others to compare their performance with competitors globally. Those companies that do not make themselves comparable will be at a disadvantage and their ability to attract capital and create value going forward will be undermined.

Transparent corporate information is necessary now more than ever. Investors need clear, credible and internationally comparable financial and non-financial information on which to base their decisions. Without it, investor confidence in a company can be quickly destroyed.

The EU regulation is an important first step in what is the biggest change to financial reporting in 25 years and as such makes the transition to IFRS an urgent and important issue for all listed companies in Ireland.