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Negative Effects of Adoption of International Financial Reporting Standards

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Negative Effects of Adoption of International Financial Reporting Standards
Abstract
The international accounting standards board (IASB) has replaced the international accounting standards committee (IASC) in 2001 and at the same time many standards of IFRS come from the International Accounting Standards which issued by IASC. After the new standards announce, the uptrend of globalisation has pushed more and more countries on their ways of adopting the international accounting standards. The drive for IASB is a British initiative and London is the headquarters for the IASB. Natural expectation would be that at least the British business will support a British initiative. The adoption of international accounting standards required GAAP used by the UK to ensure the consistency with the IASB’s IFRS. However, a concern is that there are substantial differences among different countries in implementation of IFRS and the notion that uniform standards will produce uniform financial reporting will cause some problems in the practical operation of accounting. As stated in the case the IASB is facing serious challenges from its home front. This essay focuses on the discussion of impacts of the adoption of IFRS, such as effects of fair value accounting, which will be analyzed and clarified. keywords: International Accounting Standard Board (IASB); International Financial Reporting Standard (IFRS); Fair Value Accounting; Scientific Approach; Naturalistic Approach; Normative Theory; Positive theory.

Introduction
In recently years, as the rapid increase of global economic, the competition between the international businesses is getting more and more furious. A large number of countries try to find a way to be more competitive, so the multinational trading businesses are largely developed. Even though the businesses can get much commercial opportunities from the international trading, the difference of the accounting standards between the multinational businesses is a big problem, such as, the issue of selection of the accounting standards of
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