Adoption of Ifrs in Bulgaria - 1197 Words

Introduction of IFRS for small and medium companies in Bulgaria In this essay we discuss the development and adoption of the International Financial Reporting Standards (IFRS) in the Republic of Bulgaria. Most of the characteristics and features apply not only to this country, but also to most developing economies in Europe. The IFRS are a set of standards which imply rules, methods and governance for reporting and interpreting financial data. The purpose of the IFRS is to develop a set of universal standards to be applied and comprehended worldwide, in order to achieve harmonization and standardization among reporting entities. Bulgaria was accepted as a member of the European†¦show more content†¦The new IAS 32, IAS 39 and IFRS 7 are a major improvement, but their implementation would call for a significant change in the existing information systems. As a famous Bulgarian saying literally states - â€Å"change is a headache†. However, there definitely are crucial advantages of the IFRS. To begin with, on the whole the financial statements are of higher quality, more reliable, understandable, complete and objective. The use of IFRS implies a high degree of confidence in the provided information. Another thing is that there exists a comparison possibility of financial data between entities that have adopted the standards. Also users of financial statements that are not aware of the Bulgarian GAAP would safe time, effort and resources to interpret the information. This would enhance the communication and trust between Bulgarian and foreign companies and therefore boost international investments. Entrepreneurs seeking high returns in emerging economies would gladly consider Bulgarian markets as prospective targets. Moreover, large companies from the European Union planning to expand in developing economies of the new members w ill prefer to look at financial statements produced according to IFRS. When selecting a partner, merger or acquisition target they will consider safety, reliability etcetera, which are ensured by the new standards. These advantages will not only apply to foreign entities. Bulgarian companies will also benefit from the introduction ofShow MoreRelatedWhat are the disadvantages of moving toward a set of global standards and what barriers need to be overcome to achieve the goal of standardization1104 Words   |  5 Pagesopinion, there are many advantages that speak for IFRS and their further development and adoption worldwide. First of all, accepting an international set of accounting principles will dramatically decrease the costs for reconciling one company’s financial reports with another’s. Comparing financial statements nowadays is one of the biggest issues for many firms operating on the global market, as accountants across countries follow different rules. 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