The Accounting Standards Board (ASB) is ready to incur 78.9 million pounds in order to move to the International Financial Reporting Standards (IFRS). The new system would introduce across the business community, but the ABS insists the cost will be well worth it.
The rule book will be reduced from 2,000 pages to 400. The scope for auditing errors will also be reduced. The new standards would modernize and simplify the accounting system which would provide make it easier to read financial statements and benefit the investors and the market in general.
The system had been scrutinized and debated for 6 years and is expected to be fully in place by summer 2013. Transition costs for companies of medium to large size are expected to average 80 million pounds.
One question that arises associated with the changes that different economies are trying to implement to their accounting standards is whether it is the right time. With the global economy being fragile would it move the resources from strategizing about the future of the company to getting the books compliant with the new standards.