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In my last  blog entry, I referred to the chameleon nature of the description of IFRS adoption in many countries. I described the contradictions that the International Accounting Standards Board (IASB) presents when it refers to the overwhelming acceptance of the International Financial Reporting Standards (IFRS) globally. This contradiction and confusion generates ambiguity in the application of the standards in most less developed countries that seem to apply the standards from different angles than anticipated by the IASB. This in turn has the potential to undermine the achievement of the benefits of these standards as presented by proponents of IFRSs. 

The question is, how different or similar will the outcomes (results) of IFRSs application(s) be if some countries adopt IFRSs without modifications as compared to those that apply modified versions of the standards? Will the IASB be able to achieve the goal of comparability of financial statements across borders? Will the need to harmonize accounting practices globally in order to achieve uniformity be fulfilled?  The aim of this blog entry is to reassess the claims that countries and the IASB  make when they speak of IFRS adoption, looking for the best way to gauge if and when a country has actually adopted IFRSs.

Let’s start with the basic premise that a single global accounting standard has the prospects of improving information quality across borders and to foster cross border investments. This premise rests on the notion that granted that a single global accounting standard is in place, comparability of financial statements will be achieved, leading to a reduction in information processing costs associated with different national accounting standards, and thereby resulting in a reduction in the overall cost of capital.

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