Demerits of IFRSs

Question

Write down the demerits of IFRSs.

Answer 1

Demerits of IFRSs:

• It is hard to concur on the global accounting language and whether it must be based upon principles or rules. It will mean which national models of best practice might be lost.

• There will be preliminary training costs for preparers, auditors as well as enforcers.

• Fair value accounting leads to volatility and might reflect estimation managerial manipulation or noise.

• Although some regulatory co-ordination, economic forces and political will lead to inconsistency in the implementation.