Benefits of Changing to IFRS

If you are considering whether to adopt IFRS or planning to wait until you are legally required to do so, it makes sense to consider your options carefully.

We can help you make a careful preliminary assessment and a cost/benefit analysis of whether or not under your particular circumstances, an adoption of IFRS would be desirable. We can also help you examine different scenarios concerning timing of adopting IFRS.

The number of companies which elect to adopt IFRS is growing and this is because IFRS reporting offers a wide scope of benefits. Examples of these benefits include the following:

• IFRS significantly improves the comparability of entities and provide more consistent financial information.
• IFRS are accepted as a financial reporting framework for companies seeking admission to almost all of the world’s stock exchanges (including US).
• The enhanced comparability of the companies’ financial information and the improved quality of communication to their stockholders, decrease investor uncertainty, reduce risk, increases market efficiency and eventually minimises the cost of capital.
• IFRS eliminates barriers to cross-border trading in securities, by ensuring that financial statements are more transparent.
• Management reporting for internal purposes under IFRS, can improve the quality and consistency of information that management needs in order to make effective, efficient and timely decisions for the business.
• IFRS adoption may be used as a chance to make some strategic improvements to your finance systems and processes as well as to reduce costs in the longer term.
• IFRS financial statements that are universally understood and comparable can both improve and initiate new relationships with customers and suppliers across national borders.
• Because of the positive effect IFRS financial information has on credit ratings, a company’s position strengthens in negotiations with credit institutions and cost of borrowings are reduced.
• IFRS can also result in more accurate risk evaluations by lenders and to a lower risk premium. It also helps companies to take advantage of alternative forms of finance.
• In the case of groups it removes the need for individual companies to prepare two set of financial statements, if all individual companies in the group apply IFRS. It also allows multinational groups to have a common accounting language, thereby improving management reporting and decision making.
• IFRS reporting makes easier to implement cross-border acquisitions, initiate partnerships & cooperation agreements with foreign entities, simplify the sale of the reporting entity and lower the costs of integration in post acquisition periods.
• As IFRS hit the market, analysts and investors will become more sophisticated very quickly and will be less forgiving towards companies which provide the market with the poor disclosures of Greek GAAP.