Harmonization of Financial Reporting (Including IASCs Guidelines) Assignment Help
Factors to Know from the Experts about Harmonizing the Financial Reports
When a particular organization prepares financial reports based on the principles of International Accounting Standards that are accepted all across the globe, they are referred to as harmonization of financial statements.
It is due to the rising number of multi-national organizations, various foreign investments and crosses border listing of different companies on the stock exchanges that business community today prefers to follow uniform accounting principles.
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The benefits of harmonizing financial reports
- It helps in reducing an organization’s reporting cost. Getting a financial reporting done is very costly especially for those organizations that have their operations spread throughout the world. They have to make a financial report in accordance with accounting principles of different countries and then combine them.
Harmonizing financial reports is a very good alternative for all these countries because here they simply have to prepare a single report. So it becomes quite cost-effective. It also helps you to properly review and then evaluate the performance of various foreign subsidiaries and also their associates.
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- An effective harmonizing of different financial statements helps in improving the comparability among various organizations. It prevents the preparation of alternative accounting statements. If different organizations prepare their financial statements in different ways in different organizations then comparing these statements become extremely difficult.
- Harmonizing different financial statements help both foreign companies as well as investors to assess the performance of companies.This also reduces inconsistencies and contradictions regarding various concepts of Finance.
Users of this statement are able to get genuine financial reports that help them to get a clear view of the performance and position of a particular organization.
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